SOURCE: Plaza Bank

Plaza Bank

January 25, 2017 13:32 ET

Plaza Bancorp, the Holding Company of Plaza Bank, Announces Financial Results for the Year and Fourth Quarter Ended December 31, 2016 (unaudited)

IRVINE, CA--(Marketwired - Jan 25, 2017) - Plaza Bancorp (OTC PINK: PLZZ)

2016 highlights

  • 16% growth in total assets to $1.2 billion
  • Both loans held for investment and deposits exceed $1 billion
  • Net income more than doubled in 2016

Plaza Bancorp (OTC PINK: PLZZ) (the "Company"), the holding company of Plaza Bank (the "Bank"), reported unaudited net income for the quarter ended December 31, 2016 of $3.0 million, or $0.10 per share on a diluted basis compared with $2.8 million, or $0.09 per diluted share for the third quarter of 2016. For the quarter ended December 31, 2016, the Company's annualized return on average assets was 1.02% and annualized return on average equity was 10.33%, up from an annualized return on average assets of 1.00% and an annualized return on average equity of 9.79% for the third quarter of 2016.

For the year ended December 31, 2016, the Company recorded net income of $11.1 million, or $0.37 per diluted share. For the same period in 2015, the Company recorded net income of $4.3 million, or $0.14, per diluted share. For the year ended December 31, 2016, the Company's return on average assets was 1.00% and return on average equity was 9.82%, up from a return on average assets of 0.44% and a return on average equity of 4.24% for the same period in 2015. The Company's results in 2015 included $4.9 million in merger related expenses.

Gene Galloway, Chief Executive Officer of the Company and the Bank, commented on the year's results, stating "Management is very pleased with the consistent, solid financial results for 2016 that are the direct result of our employees' efforts and dedication to the Bank. In 2016, our loans outstanding grew in each quarter, ranging from $24 million to $41 million. Interest income increased in every quarter of the year in a range from a $412,000 to $999,000. Earnings per share ranged from 8 cents in the first quarter to 10 cents in the second and fourth quarters."

Mr. Galloway concluded with, "Since the merger 18 months ago, that doubled our asset size, we have upgraded certain key personnel and our infrastructure that will result in improved efficiencies and higher earnings. We are looking forward to a very successful 2017."

Other highlights for the year or quarter ended December 31, 2016 included:

  • Loans held for investment grew during the quarter and year by $24.2 million and $139.0 million, respectively, to $1.0 billion. The year over year growth is 15.8%
  • Loan originations by the Bank in the fourth quarter and the year totaled $94.0 million and $377.7 million, respectively
  • Net interest income increased $279,000, or 2.1%, to $13.3 million for the fourth quarter of 2016 compared to $13.0 million for the third quarter of 2016. Net interest income for the year grew $3.9 million, or 7.9%, to $50.0 million
  • The Company's net interest margin ("NIM") for the quarter was 4.57% and for the year was 4.68%
  • Total revenues in the fourth quarter increased $654,000, or 4.4%, to $15.4 million compared to $14.8 million for the previous quarter
  • During the quarter, the Company realized a gain of $644,000 on the sale of $10.8 million of SBA 7(a) loans and one SBA 504 loan. For the year the Bank sold $47.9 million in loans for a gain $3.2 million
  • Nonperforming assets net of discounts totaled $2.8 million, or 0.23% of total assets at December 31, 2016 compared to $2.0 million, or 0.17% at September 30, 2016 and $1.4 million, or 0.14% at December 31, 2015
  • The ratio of allowance for loan losses to total loans held for investment was 1.27% at December 31, 2016. Including the credit discount on acquired loans of $1.6 million in the ratio, the ratio increases to 1.43%
  • The Company's efficiency ratio for the quarter was 63.9% and for the year was 64.4%
  • Tangible book value per share increased $0.10 to $3.65 during the fourth quarter

Net interest income for the quarter and year ended December 31, 2016 totaled $13.3 million and $50.0 million, respectively. Loan interest income for the quarter totaled $14.8 million, the average total outstanding loans for the quarter were $1,012.8 million and the annualized yield was 5.82%. Interest expense related to deposits was $1.3 million for the quarter, or 0.51% annualized. The interest expense related to the subordinated debentures for the quarter was $453,000, or 7.245% annualized.

The Company recorded a $243,000 provision for loan losses during the fourth quarter of 2016 principally as a result of the $24.2 million growth in loans held for investment. For the fourth quarter, total charge-offs were $145,000 and recoveries were $4,000. For the year ended December 31, 2016, the Company recorded a total provision for loan losses of $1.6 million and net charge-offs of $173,000.

Non-accrual loans net of discounts totaled $2.6 million at December 31, 2016 of which $1.4 million is covered under a Federal Deposit Insurance Corporation (FDIC) share-loss agreement or SBA guaranty. At December 31, 2015, the non-accrual loans net of discounts totaled $1.2 million with $534,000 of the non-accrual loans covered under a FDIC share-loss agreement or SBA guaranty.

Non-interest income for the fourth quarter of 2016 was $2.2 million. Non-interest income for the fourth quarter is primarily comprised of a net gain from the sale of loans of $644,000, loan servicing income of $400,000, deposit fee income of $279,000, partial reversal of the allowance for single family loans sold of $400,000, loan referral fee income of $58,000 and other fee income totaling $403,000.

Non-interest expense totaled $10.0 million for the fourth quarter of 2016. Compensation and benefits comprises approximately 64%, or $6.5 million, of the total non-interest expense. The Company had 159 full-time equivalent employees as of December 31, 2016.

The Company's effective tax rate for the fourth quarter was 41.0% and for the year of 2016 was 40.1%, for a total tax expense of $2.1 million for the quarter and $7.5 million for the year.

Total loans held-for-investment, net of the allowance for loan losses, grew 2% to $1.0 billion at December 31, 2016 from $997.1 million at September 30, 2016 and grew 16% from $882.2 million at December 31, 2015. At December 31, 2016, the Company's unfunded commitments on originated loans totaled $170.0 million.

Total deposits decreased $12.5 million, or 1%, to $1.0 billion as of December 31, 2016, from $1.0 billion as of September 30, 2016, and increased 14% from $884.0 million as of December 31, 2015.

FHLB advances increased to $60.0 million as of December 31, 2016 compared to $30.0 million as of September 30, 2016, and $24.0 million at December 31, 2015.

At December 31, 2016, the Company had total regulatory capital on a consolidated basis of approximately $118.7 million, and the Bank had total regulatory capital of approximately $136.0 million. The federal banking regulators' capital ratios requirements for "well capitalized" banks are 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. At December 31, 2016, the Bank exceeded all regulatory capital ratio requirements for well capitalized banks.

The following table sets forth the capital ratios of the Company and the Bank at December 31, 2016:

             
Plaza Bancorp   12/31/2016   9/30/2016   12/31/2015
  Tier 1 leverage ratio   8.93%   9.25%   8.56%
  Tier 1 capital ratio   9.78%   9.87%   9.35%
  Common equity tier 1 capital ratio   9.78%   9.87%   9.35%
  Capital ratio   13.33%   13.51%   13.24%
             
Plaza Bank            
  Tier 1 leverage ratio   10.44%   10.86%   10.48%
  Tier 1 capital ratio   11.38%   11.57%   11.44%
  Common equity tier 1 capital ratio   11.38%   11.57%   11.44%
  Capital ratio   12.63%   12.82%   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.

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, except per share amounts)   December 31,     September 30,     December 31,  
ASSETS   2016     2016     2015  
                         
Cash and cash equivalents   $ 137,095     $ 138,085     $ 97,576  
Investment securities - available for sale     23,117       25,570       28,215  
                         
Loans held for sale     6,227       3,338       4,535  
                         
Loans held for investment     1,021,203       997,051       882,199  
Allowance for loan losses     (12,966 )     (12,856 )     (11,506 )
Net loans held for investment     1,008,237       984,195       870,693  
                         
Accrued interest receivable     3,815       3,579       3,201  
Other real estate owned     206       206       206  
Premises and equipment     7,786       7,826       7,581  
Deferred income tax     10,852       10,384       15,174  
Goodwill and other intangibles     8,963       9,134       9,692  
Mortgage servicing rights     2,963       2,929       2,719  
Indemnification asset     326       420       762  
Other assets     9,934       10,113       10,378  
                         
TOTAL ASSETS   $ 1,219,521     $ 1,195,779     $ 1,050,732  
                         
LIABILITIES AND EQUITY                        
                         
Deposits                        
  Noninterest-bearing demand   $ 311,026     $ 295,371     $ 316,516  
  Savings, now and money market accounts     453,009       477,265       355,515  
  Time deposits     240,515       244,407       211,998  
    Total Deposits     1,004,550       1,017,043       884,029  
                         
Borrowings     84,728       54,720       48,696  
Accrued interest and other liabilities     11,550       8,309       10,738  
    Total Liabilities     1,100,828       1,080,072       943,463  
                         
                         
Total stockholders' equity     118,693       115,707       107,269  
                         
TOTAL LIABILITIES AND EQUITY   $ 1,219,521     $ 1,195,779     $ 1,050,732  
                         
BASIC BOOK VALUE PER SHARE   $ 3.95     $ 3.85     $ 3.57  
                         
BASIC BOOK VALUE PER DILUTED SHARE   $ 3.91     $ 3.83     $ 3.54  
                         
TANGIBLE BOOK VALUE PER SHARE   $ 3.65     $ 3.55     $ 3.25  
                         
TANGIBLE BOOK VALUE PER DILUTED SHARE   $ 3.61     $ 3.52     $ 3.22  
                         
BASIC SHARES OUTSTANDING     30,039,244       30,039,244       30,034,244  
                         
DILUTED SHARES OUTSTANDING     30,393,232       30,244,080       30,296,867  
                         
                         
Capital Ratios:                        
  Tier 1 leverage ratio     8.93 %     9.25 %     8.56 %
  Tier 1 risk-based capital ratio     9.78 %     9.87 %     9.35 %
  Common equity tier 1 capital ratio     9.78 %     9.87 %     9.35 %
  Risk-based capital ratio     13.33 %     13.51 %     13.24 %
                         
                     
Plaza Bancorp  
Consolidated Condensed Statements of Operations  
(Unaudited)  
                     
  Quarter-
to-Date
  Quarter-
to-Date
  Quarter-
to-Date
  Year-
to-Date
  Year-
to-Date
 
 
 
December
31, 2016
 
 
September
30, 2016
 
 
December
31, 2015
 
 
December
31, 2016
 
 
December
31, 2015*
 
 
                               
(dollars in thousands, except per share amounts)                              
Interest income $ 15,096   $ 14,684   $ 12,722   $ 56,648   $ 51,071  
Interest expense   1,838     1,705     1,429     6,630     4,990  
    Net interest income   13,258     12,979     11,293     50,018     46,081  
                               
Provision for loan losses   243     494     1,428     1,634     2,367  
Net interest income after provision for loan losses   13,015     12,485     9,865     48,384     43,714  
                               
Non-interest income:                              
  Loan servicing and other fees   400     333     285     1,439     892  
  Bank and other fee income   279     299     300     1,180     1,637  
  Net gain from loan sales   644     625     1,039     3,176     3,551  
  Other income   858     549     1,419     3,002     3,800  
    Total non-interest income   2,181     1,806     3,043     8,797     9,880  
                               
Non-interest expense:                              
  Compensation and benefits   6,473     6,216     5,686     25,100     23,452  
  Premises and occupancy   1,241     926     957     4,363     4,370  
  Data processing   660     607     590     2,493     2,818  
  Other real estate owned expenses   2     -     55     2     56  
  FDIC insurance premiums   39     128     130     451     802  
  Professional fees   753     709     356     2,645     5,662  
  Marketing expense   134     217     194     713     929  
  Other expenses   736     746     823     2,837     3,835  
    Total non-interest expense   10,038     9,549     8,791     38,604     41,924  
                               
Income before income taxes   5,158     4,742     4,117     18,577     11,670  
Provision for income taxes   2,117     1,933     722     7,449     4,852  
  Income from continuing operations   3,041     2,809     3,395     11,128     6,818  
Discontinued operations                              
  Loss on discontinued operations   -     -     4     -     (3,643 )
  Income tax provision/(benefit)   -     -     1     -     (1,490 )
    Loss discontinue operations   -     -     3     -     (2,153 )
                               
Net income before noncontrolling interest in Plaza Bank   3,041     2,809     3,398     11,128     4,665  
Less: Net income attributed to noncontrolling interest in Plaza Bank   -     -     -     -     (336 )
Net income $ 3,041   $ 2,809   $ 3,398   $ 11,128   $ 4,329  
                               
EARNINGS PER SHARE - BASIC $ 0.10   $ 0.09   $ 0.11   $ 0.37   $ 0.15  
                               
EARNINGS PER SHARE - DILUTED $ 0.10   $ 0.09   $ 0.11   $ 0.37   $ 0.14  
                               
BASIC WEIGHTED AVERAGE SHARES   30,039,244     30,039,244     30,038,188     30,037,218     29,708,498  
                               
DILUTED WEIGHTED AVERAGE SHARES   30,315,516     30,238,438     30,301,593     30,257,686     30,035,088  
                               
RETURN ON AVERAGE ASSETS   1.02 %   1.00 %   1.30 %   1.00 %   0.44 %
                               
RETURN ON AVERAGE EQUITY   10.33 %   9.79 %   12.83 %   9.82 %   4.24 %
*Pooling of Interest with Manhattan Bancorp effected in June 2015
 
                   
Plaza Bancorp  
Loans Held for Investment Portfolio Composition  
(Unaudited)  
                   
    December 31,     September 30,     December 31,  
    2016     2016     2015  
(dollars in thousands)                        
Construction and land development   $ 10,574     $ 11,502     $ 12,906  
Commercial real estate and other     637,932       606,680       522,739  
Commercial     181,115       182,366       162,485  
Residential real estate     125,248       136,873       131,051  
Consumer     70,148       63,769       56,656  
Total     1,025,017       1,001,190       885,837  
Deferred loan fees, net of costs     (3,814 )     (4,139 )     (3,638 )
Loans held for investment     1,021,203       997,051       882,199  
Allowance for loan losses     (12,966 )     (12,856 )     (11,506 )
Total net loans   $ 1,008,237     $ 984,195     $ 870,693  
                         
             
Non-Performing Assets
     
    December 31,   September 30,   December 31,
    2016   2016   2015
(dollars in thousands)                  
Non-Accrual Assets                  
                   
Loans (net of discounts)   $ 2,579   $ 1,768   $ 1,236
OREO     206     206     206
                   
Delinquent Loans (net of discounts)                  
30 - 89 days past due   $ 2,978   $ 3,461   $ 3,487
90 days and greater (included in non-accrual)     1,713     1,363     109
                   

Contact Information

  • Media Contacts:

    Gene Galloway
    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