ProAmerica Bank Reports 2012 Net Income of $1.0 Million, Record Quarterly Operating Net Income of $314,000 and Total Assets of $154.1 Million

LOS ANGELES, CA--(Marketwire - Feb 28, 2013) - ProAmérica Bank (OTCQB: PMRA) today reported Net Income of $1,037,000, or 37 cents per share diluted for the year ended December 31, 2012. For the fourth quarter of 2012, the Bank reported Net Income of $314,000, or 11 cents per share diluted. Total assets increased 19% to $154.1 million as of December 31, 2012, as compared to the prior year. "With a strong fourth quarter performance, ProAmérica Bank has achieved profitability for eight of the past nine quarters and we look forward to continuing that trend," stated L. Bruce Mills, Jr., President and CEO. "Our focus on fundamentals has paid off. Our net income was achieved without reversal of loan loss provisions or deferred tax assets, and our reduction in non-performing assets positions us well as we begin 2013," continued Mills.

"I am pleased to report 2012 was a defining year for ProAmérica Bank," announced Executive Chairwoman Maria Contreras-Sweet. "After six years of consolidated effort, we have turned the corner on profitability. Our systems are optimized, our people are energized, and our Bank is well capitalized... all of which has yielded our first complete year of profitability. I am grateful to the Board and shareholders for remaining focused on our vision and steadfast in making our mission a reality. Together with our clients we have built a strong foundation from which to support our founding principles of empowering local businesses. Our success provides us a solid platform to move the Bank forward and grow it in new ways that better serve our community and reward our shareholders." 

The Bank also announced that on February 22, 2013, it completed the sale of its only other real estate owned property reducing nonperforming assets by $3,900,000.

2012 Fourth Quarter/Annual Highlights

• Three-month Net Income of $314,000, compared to a loss of $1,369,000 in the prior year fourth quarter.
  
  
• Total Assets at December 31, 2012 totaled $154.1 million, an increase of $25.0 million or 19% from December 31, 2011.
  
  
• Total Loans at December 31, 2012 declined to $96.5 million, a decrease of $10.4 million or 10% from December 31, 2011.
  
  
• Total Deposits at December 31, 2012 increased to $130.3 million, an increase of $24.6 million or 23% from December 31, 2011.
  
  
• Capital ratios are in excess of all minimums required to be "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage Ratio of 14.9% and a Total Risk-Based Capital Ratio of 21.0% at December 31, 2012. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital Ratio.

Financial Results
Adjusted income from operations (income before provisions for loan losses and income taxes) was $315,000 for the fourth quarter of 2012, as compared to a loss of $91,000 for the same period in 2011. Management believes adjusted income from operations is a better measure of core earnings performance.

For the 2012 fourth quarter, Net Interest Income before the Provision for Loan Losses increased $141,000 compared to the 2011 fourth quarter. The Net Interest Margin declined to 3.9% for the quarter ended December 31, 2012, down from 4.0% for the 2011 fourth quarter. The decline is due to the decline in loans compared to the previous year. The Bank had several large loans pay down in the fourth quarter of 2012. Management expects loan growth to resume in the first quarter of 2013.

There was no Provision for Loan Losses required in the fourth quarter of 2012, compared to $1,278,000 for the fourth quarter of 2011. The Bank had no loan charge-offs in the fourth quarter of 2012. Net charge-offs to average loans outstanding was only 0.20% for the year ended December 31, 2012, compared to 0.57% the prior year. Nonaccrual loans declined 51% to $5.6 million as of December 31, 2012, compared to the prior year end.

Non-interest Income increased $259,000, or 617% in the fourth quarter 2012 versus 2011 as a result of a higher volume of SBA loans sold.

Non-interest Expense for the 2012 fourth quarter was $1,406,000, compared with $1,412,000 for the 2011 fourth quarter. An increase in Salaries and Employee Benefits expense was offset by lower Operating Expense and Occupancy Expense. Occupancy expense was reduced by over $300,000 in 2012 as a result of the Bank's relocation of its headquarters in December 2011. The efficiency ratio was 81.7% for the 2012 fourth quarter, compared with 106.9% for the same period last year.

Loans, before the allowance for loan losses, declined 10% to $93.6 million at December 31, 2012, compared to $103.8 million at December 31, 2011. Other Real Estate Owned increased to $3.9 million in 2012 as a result of the foreclosure of a single loan in April 2012. The property closed escrow on February 22, 2013. There was no Other Real Estate Owned in 2011.

Total Deposits increased 23% to $130.3 million at December 31 2012, from $105.8 million at December 31, 2011. Several of the Bank's larger depositors are required by law to have their deposits fully insured. The demise of the U.S. Treasury's Transaction Account Guarantee Program on December 31, 2012 resulted in the loss of unlimited FDIC insurance on demand deposit accounts. In December 2012, clients requiring insured deposits transferred approximately $30 million from demand deposit accounts to reciprocal money market and certificate of deposit products at the Bank, which allow for full FDIC insurance.

Asset Quality
Nonperforming Assets (the sum of loans past due 90 days and accruing, nonaccrual loans and other real estate owned) decreased to 6.2% of total assets at December 31, 2012, compared with 8.8% at December 31, 2011. All of the nonaccrual loans are current in their payments. The Bank sold its only other real estate owned on February 22, 2013 at a small loss. Had this sale occurred as of December 31, 2012, the ratio of Nonperforming Assets to total assets would have been 3.6%.

The Allowance for Loan Losses was $2.9 million, or 3.0% of loans, at December 31, 2012, compared with $3.1 million, or 2.9% of loans, at December 31, 2011. There were no net loan charge-offs for the 2012 fourth quarter as compared to 1.3% of loans for the 2011 fourth quarter.

"Reducing the level of nonperforming loans remains a key focus of management" stated Mills. He continued, "These nonaccrual loans are all the result of troubled debt restructurings, not defaults due to failure to make their loan payments as agreed. The Bank had no loans 30 days or more delinquent as of December 31, 2012."

Capital Resources
Total Shareholders' Equity increased to $22.6 million at December 31, 2012 from $21.6 million at December 31, 2011. The Bank's book value available to common shareholders per common share increased to $6.86 at December 31, 2012 from $6.49 at December 31, 2011.

At December 31, 2012, the Bank's Tier 1 Leverage Capital Ratio was 14.9% versus 16.5% at December 31, 2011. The Total Risk-based Capital Ratio was 21.0% as of December 31, 2012, as compared to 20.2% at December 31, 2011.

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)
				December 31,				December 31,				%
				2012				2011				Change
				Unaudited				Audited
Assets:
	Cash and Due From Banks			$	2,440			$	2,355			3.61	%
	Federal Funds Sold				43,390				9,935			336.74	%
	Interest-bearing Balances at Other Financial Institutions				7,701				9,902			-22.23	%
		Total Cash and Cash Equivalents			53,531				22,192			141.22	%
	Loans Net of Deferred Loan Fees/Costs				96,467				106,860			-9.73	%
	Allowance for Loan Losses				2,869				3,074			-6.67	%
		Loans Net of Allowance for Loan Losses			93,598				103,786			-9.82	%
	Premises and Equipment, net				1,034				918			12.64	%
	Federal Home Loan Bank Stock				515				418			23.21	%
	Other Real Estate Owned				3,920				0			NA
	Accrued Interest Receivable and Other Assets				1,497				1,802			-16.93	%
		Total Assets		$	154,095			$	129,116			19.35	%
Liabilities:
	Non-Interest-Bearing Demand Deposits			$	26,443			$	31,789			-16.82	%
	Interest-Bearing Demand Deposits (NOW Deposits)				2,262				3,585			-36.90	%
	Savings and Money Market				46,686				22,649			106.13	%
	Certificates of Deposit				54,953				47,732			15.13	%
		Total Interest-Bearing Deposits			103,901				73,966			40.47	%
		Total Deposits			130,344				105,755			23.25	%
	Other Borrowings				0				0			0.00	%
	Accrued Interest Payable and Other Liabilities				1,121				1,774			-36.81	%
Total Liabilities					131,465				107,529			22.26	%
Shareholders' Equity:
	Common Stock				27,248				27,245			0.01	%
	Additional Paid in Capital				1,717				1,714			0.18	%
	Accumulated Deficit				(10,085	)			(11,122	)		-9.32	%
	SBLF Preferred Stock				3,750				3,750			0.00	%
		Total Shareholders' Equity			22,630				21,587			4.83	%
		Total Liabilities and Shareholders' Equity		$	154,095			$	129,116			19.35	%
		Tier 1 leverage			14.88	%			16.52	%
		Tier 1 risk-based capital			19.71	%			18.97	%
		Total risk-based capital			20.97	%			20.24	%

PROAMÉRICA BANK STATEMENT OF OPERATIONS
For the Periods Indicated
(Dollars in thousands except per share data)
			Three Months										Twelve Months
For The Period Ended December 31,			2012			2011				% Change			2012			2011				% Change
			Unaudited			Unaudited							Unaudited			Audited
Interest Income:
	Interest and Fees on Loans		$	1,492		$	1,357			9.95	%		$	6,072		$	5,778			5.09	%
	Interest on Federal Funds Sold			23			11			109.09	%			57			44			29.55	%
	Interest on Balances at Other Financial Institutions			12			17			-29.41	%			45			77			-41.56	%
	Dividends on FHLB and PCBB Stock			8			0			NA				14			1			1300.00	%
		Total Interest Income		1,535			1,385			10.83	%			6,188			5,900			4.88	%
Interest Expense:
	Interest on Deposit Accounts			115			106			8.49	%			424			402			5.47	%
	Net Interest Income			1,420			1,279			11.02	%			5,764			5,498			4.84	%
Provision for Loan Losses				0			1,278			-100.00	%			0			1,544			-100.00	%
	Net Interest Income After Provision for Loan Losses			1,420			1			141900.00	%			5,764			3,954			45.78	%
Non-Interest Income:
		Non-Interest Income		301			42			616.67	%			758			604			25.50	%
Non-Interest Expense:
	Salaries and Employee Benefits			855			699			22.32	%			3,364			3,015			11.58	%
	Stock Based Compensation Expense			12			67			-82.09	%			41			276			-85.14	%
	Occupancy Expense			150			254			-40.94	%			566			921			-38.55	%
	Operating Expense			389			392			-0.77	%			1,513			1,259			20.17	%
		Total Non-Interest Expense		1,406			1,412			-0.42	%			5,484			5,471			0.24	%
	Pre-tax Income (Loss)			315			(1,369	)		-123.01	%			1,038			(913	)		-213.69	%
Provision for Income Taxes				1			0			NA				1			1			0.00	%
	Net Income (Loss)		$	314		$	(1,369	)		-122.94	%		$	1,037		$	(914	)		-213.46	%
	Earnings (Loss) per share - basic		$	0.11		$	(0.50	)		-122.94	%		$	0.38		$	(0.33	)		-213.46	%
	Earnings (Loss) per share - diluted		$	0.11		$	(0.50	)		-122.81	%		$	0.37		$	(0.33	)		-212.84	%

PROAMÉRICA BANK FINANCIAL HIGHLIGHTS
For the Periods Indicated
(Dollars in thousands except per share data)
			Three Months											Twelve Months
For The Period Ended December 31,			2012				2011				% Change			2012				2011				% Change
			Unaudited				Unaudited							Unaudited				Unaudited
Per Share:
	Net income (Loss), basic		$	0.11			$	(0.50	)		-122.94	%		$	0.38			$	(0.33	)		-213.46	%
	Net income (Loss), diluted		$	0.11			$	(0.50	)		-122.81	%		$	0.37			$	(0.33	)		-212.84	%
	Book value - Common		$	6.86			$	6.49			5.70	%
Common Shares Outstanding
	End of period			2,751,000				2,750,000			0.04	%			2,751,000				2,750,000			0.04	%
	Average for period			2,751,000				2,750,000			0.04	%			2,750,604				2,750,000			0.02	%
Financial Ratios:
	Performance Ratios:
		Return on average assets		0.83	%			-4.19	%		-119.81	%			0.74	%			-0.75	%		-198.67	%
		Return on average common equity		6.65	%			-28.44	%		-123.38	%			5.61	%			-4.84	%		-215.91	%
		Net interest margin		3.89	%			3.95	%		-1.52	%			4.27	%			4.54	%		-5.95	%
		Efficiency ratio		81.65	%			106.89	%		-23.61	%			84.10	%			89.66	%		-6.20	%
	Capital Adequacy Ratios (Period-end):
		Tier 1 leverage		14.88	%			16.52	%		-9.93	%
		Tier 1 risk-based capital		19.71	%			18.97	%		3.90	%
		Total risk-based capital		20.97	%			20.24	%		3.61	%
Asset Quality Ratios:
	Allowance for loan and lease losses to total loans			2.97	%			2.87	%		3.48	%
	Allowance for loan and lease losses to nonaccrual loans			51.14	%			27.07	%		88.92	%
	Nonperforming loans to total loans			5.82	%			10.63	%		-45.25	%
	Nonperforming assets to total assets			6.19	%			8.80	%		-29.66	%
	Net charge-offs (recoveries) to average loans (annualized)			-0.02	%			1.31	%		-101.53	%			0.20	%			0.57	%		-64.91	%
Asset Quality Measures:
	Nonaccrual loans (1)			5,611				11,358			-50.60	%
	Other real estate owned			3,920				0			NA
		Total nonperforming assets		9,531				11,358			-16.09	%
	(1) Nonaccrual loans less than 30 days past due			5,611				6,143			-8.66	%