ProAmerica Bank Reports 2014 Fourth Quarter and Year Results

LOS ANGELES, CA--(Marketwired - Feb 26, 2015) - ProAmérica Bank (OTCQB: PMRA) today reported Net Income for the fourth quarter of 2014 of $182,000, or $0.06 per diluted common share. Net Income was $626,000, or $0.22 per diluted common share for the year ended December 31, 2014. Assets grew to a record $165.2 million. "We are pleased to report continued growth and earnings in 2014," stated L. Bruce Mills, Jr., President and CEO. "Our growing list of quality clients is a testament to the hard work and dedication of all the members of our ProAmérica Bank team. Our clients remain our priority to ensure that we meet their growing needs. We will continue to focus on expanding our range of products and services to meet the needs of our clients," continued Mills.

"ProAmérica Bank continues to build on its strong foundation with a strategic and focused approach," stated Chairwoman Maria S. Salinas. "Our leadership team is excited about the Bank's momentum and committed to delivering strong performance. We believe that we are well positioned to capture growth opportunities."

2014 Fourth Quarter/Annual Highlights

• Adjusted income from operations (income before provisions for loan losses and income taxes) was $648,000 for the three months ended December 31, 2014, compared to $772,000 in the fourth quarter of 2013. Adjusted income from operations was $1,403,000 for the year ended December 31, 2014, compared to $1,172,000 in 2013.
  
  
• Three-month Net Income of $182,000, compared to Net Income of $3,721,000 in the prior year fourth quarter. Net Income for the year ended December 31, 2014 was $626,000, compared to $4,520,000 in 2013. Both periods in 2013 included the impact of reversing the Bank's $2,949,000 valuation allowance against its deferred tax asset that arose from prior years' net operating losses.
  
  
• Total Assets at December 31, 2014 were $165.2 million, an increase of $12.3 million or 8% from December 31, 2013.
  
  
• Total Loans at December 31, 2014 increased to $117.5 million, an increase of $5.6 million or 5% from December 31, 2013.
  
  
• Total Deposits at December 31, 2014 increased to $136.1 million, an increase of $11.6 million or 9% from December 31, 2013.
  
  
• Nonperforming assets were $1,911,000 at December 31, 2014, representing 1.2% of assets.
  
  

Capital ratios were in excess of all minimums required to be "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage Ratio of 16.0% and a Total Risk-Based Capital Ratio of 20.5% at December 31, 2014. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital Ratio.

Financial Results
Net Income for the three months ended December 31, 2014 was $182,000, compared to $3,721,000 in 2013. Net Income for the year ended December 31, 2014 was $626,000, compared to $4,520,000 in 2013. Net Income in both periods of 2013 includes the impact of reversing the Bank's $2,949,000 valuation allowance against its deferred tax asset that arose from prior years' net operating losses. The reversal was made as a result of Management's belief that it is more likely than not that the Bank will be able to use the net operating losses to offset Federal and State income taxes due in future periods.

Adjusted income from operations (income before provisions for loan losses and income taxes) was $648,000 for the fourth quarter of 2014, as compared to $772,000 for the same period in 2013. Adjusted income from operations was $1,403,000 for the year ended December 31, 2014, as compared to $1,172,000 in the previous year. Management believes adjusted income from operations is a better measure of core earnings performance.

For the 2014 fourth quarter, Net Interest Income before the Provision for Loan Losses increased $8,000 compared to the 2013 fourth quarter. The Net Interest Margin declined to 3.92% for the quarter ended December 31, 2014, down from 4.21% for the 2013 fourth quarter. The decrease was due to a decline in the yield on loans in 2014 as a result of the loan portfolio repricing at lower interest rates. For the year ended December 31, 2014, Net Interest Income before the Provision for Loan Losses increased $286,000 compared to 2013. The Net Interest Margin increased to 4.16% for the year ended December 31, 2014, up from 4.04% for 2013. The increase was due to a higher level of average loans as a percentage of average assets in 2014 as compared to 2013.

A $340,000 Provision for Loan Losses was recorded in the fourth quarter of 2014 versus none in 2013. For the year ended December 31, 2014, a $340,000 Provision for Loan Losses was recorded. For the year ended December 31, 2013, a negative Provision for Loan Losses of $400,000 was recorded due to improved asset quality.

Non-interest Income declined $479,000, or 81% in the fourth quarter 2014 versus 2013 due to the receipt of a $323,000 Bank Enterprise Award in the fourth quarter of 2013 and the recovery of $187,000 interest income from prior periods upon the payoff of loans previously on nonaccrual. The award resulted from the Bank's lending performance in lower income census tracts in 2013. The Bank received a similar award in the amount of $355,000 in the third quarter of 2014. Non-interest Income decreased $188,000, or 16% for the year ended December 31, 2014 versus 2013 as a result of recoveries in 2013 of $448,000 of interest income from prior periods upon the payoff of loans previously on nonaccrual. These amounts were partly offset by an increase in gains on the sales of SBA loans in 2014 compared to 2013. Gains on sales of SBA loans were $232,000 in 2014 as compared to $183,000 in 2013.

Non-interest Expense for the 2014 fourth quarter was $1,039,000, compared with $1,386,000 for the 2013 fourth quarter. In 2014, Operating Expense included the impact of reversing a $339,000 contingent liability for the Bank's guarantee of the credit card balances of one of the Bank's troubled clients previously expensed in the third quarter of 2014. Non-interest Expense for the year ended December 31, 2014 was $5,920,000 compared with $6,053,000 in 2013. Stock Based Compensation expense declined due primarily to a large employee stock option grant being fully vested in November 2013.

The efficiency ratio was 62% for the 2014 fourth quarter, compared with 64% for the same period in 2013. The efficiency ratio was 81% for the year ended December 31, 2014 as compared to 84% in 2013.

Loans, before the allowance for loan losses, increased 5% to $117.5 million at December 31, 2014, compared to $112.0 million at December 31, 2013.

Total Deposits increased 9% to $136.1 million at December 31 2014, compared to $124.5 million at December 31, 2013.

Asset Quality
Nonperforming Assets (the sum of loans past due 90 days and accruing, nonaccrual loans and other real estate owned) increased to $1,911,000, or 1.2% of total assets at December 31, 2014, compared with $213,000 or 0.1% of total assets at December 31, 2013. All of the nonperforming loans are current in their payments. The increased Net Charge-offs in 2014 reflects the charge-off of a single loan.

The Allowance for Loan Losses was $2.1 million, or 1.8% of loans, at December 31, 2014, compared with $2.5 million, or 2.2% of loans, at December 31, 2013.

The Bank had net charge-offs to average loans outstanding of 0.61% for the year ended December 31, 2014, as compared to net recoveries to average loans outstanding of 0.02% in 2013.

Capital Resources
Total Shareholders' Equity increased to $28.1 million at December 31, 2013, up from $27.4 million at December 31, 2013. The Bank's book value available to common shareholders per common share increased to $8.78 at December 31, 2014 from $8.54 at December 31, 2013.

At December 31, 2014, the Bank's Tier 1 Leverage Capital Ratio was 16.0% versus 16.7% at December 31, 2013. The Total Risk-based Capital Ratio was 20.5% as of December 31, 2014 versus 21.0% at December 31, 2013.

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,				%
				2014				2013				Change
				Unaudited				Unaudited
Assets:
	Cash and Due From Banks			$	1,190			$	1,678			-29.1	%
	Federal Funds Sold				29,645				28,440			4.2	%
	Interest-bearing Balances at Other Financial Institutions				13,516				7,008			92.9	%
		Total Cash and Cash Equivalents			44,351				37,126			19.5	%
	Loans Net of Deferred Loan Fees/Costs				117,520				111,955			5.0	%
	Allowance for Loan Losses				2,119				2,491			-14.9	%
		Loans Net of Allowance for Loan Losses			115,401				109,464			5.4	%
	Premises and Equipment, net				785				939			-16.4	%
	Federal Home Loan Bank Stock				568				482			17.8	%
	Other Real Estate Owned				0				0			NA
	Accrued Interest Receivable and Other Assets				4,109				4,915			-16.4	%
		Total Assets		$	165,214			$	152,926			8.0	%
Liabilities:
	Noninterest-bearing Demand Deposits			$	28,655			$	24,352			17.7	%
	Interest-bearing Demand Deposits (NOW Deposits)				3,666				3,113			17.8	%
	Savings and Money Market				29,637				31,460			-5.8	%
	Certificates of Deposit				74,115				65,533			13.1	%
		Total Interest-bearing Deposits			107,418				100,106			7.3	%
		Total Deposits			136,073				124,458			9.3	%
	Other Borrowings				0				0			NA
	Accrued Interest Payable and Other Liabilities				1,065				1,065			0.0	%
Total Liabilities					137,138				125,523			9.3	%
Shareholders' Equity:
	Common Stock				27,308				27,308			0.0	%
	Additional Paid in Capital				1,957				1,910			2.5	%
	Accumulated Deficit				(4,939	)			(5,565	)		-11.2	%
	SBLF Preferred Stock				3,750				3,750			0.0	%
		Total Shareholders' Equity			28,076				27,403			2.5	%
	Total Liabilities and Shareholders' Equity			$	165,214			$	152,926			8.0	%
	Tier 1 leverage				16.00	%			16.68	%
	Tier 1 risk-based capital				19.25	%			19.76	%
	Total risk-based capital				20.50	%			21.02	%

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,				2014			2013			% Change			2014			2013			% Change
				Unaudited			Unaudited						Unaudited			Unaudited
Interest Income:
	Interest and Fees on Loans			$	1,654		$	1,637		1	%		$	6,616		$	6,343		4	%
	Interest on Federal Funds Sold				18			18		0	%			56			85		-34	%
	Interest on Balances at Other Financial Institutions				15			10		50	%			56			44		27	%
	Dividends on FHLB and PCBB Stock				15			20		-25	%			47			34		38	%
		Total Interest Income			1,702			1,685		1	%			6,775			6,506		4	%
Interest Expense:
	Interest on Deposit Accounts				129			120		8	%			465			482		-4	%
	Net Interest Income				1,573			1,565		1	%			6,310			6,024		5	%
Provision / (Reversal) for Loan Losses					340			0		NA				340			(400	)	-185	%
	Net Interest Income After Provision				1,233			1,565		-21	%			5,970			6,424		-7	%
		(Reversal) for Loan Losses
Noninterest Income:
	Gain on Sale of SBA Loans				0			18		-100	%			232			183		27	%
	Noninterest Income				114			575		-80	%			781			1,018		-23	%
		Total Non-Interest Income			114			593		-81	%			1,013			1,201		-16	%
Noninterest Expense:
	Salaries and Employee Benefits				779			872		-11	%			3,637			3,712		-2	%
	Stock Based Compensation Expense				10			26		-62	%			84			240		-65	%
	Occupancy Expense				154			161		-4	%			605			618		-2	%
	Operating Expense				96			327		-71	%			1,594			1,483		7	%
		Total Non-Interest Expense			1,039			1,386		-25	%			5,920			6,053		-2	%
	Pre-tax Income				308			772		-60	%			1,063			1,572		-32	%
Provision for Income Taxes					126			(2,949	)	-104	%			437			(2,948	)	-115	%
	Net Income			$	182		$	3,721		-95	%		$	626		$	4,520		-86	%
	Earnings Per Share - basic			$	0.07		$	1.34		-95	%		$	0.23		$	1.64		-86	%
	Earnings Per Share - diluted			$	0.06		$	1.32		-95	%		$	0.22		$	1.62		-87	%

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,			2014		2013		% Change		2014		2013		% Change
			Unaudited		Unaudited				Unaudited		Unaudited
Per Share:
	Net income, basic		$0.07		$1.34		-95.1%		$0.23		$1.64		-86.2%
	Net income, diluted		$0.06		$1.32		-95.2%		$0.22		$1.62		-86.6%
	Book value - Common		$8.78		$8.54		2.8%
Common Shares Outstanding
	End of period		2,771,000		2,771,000		0.0%		2,771,000		2,771,000		0.0%
	Average for period		2,771,000		2,771,000		0.0%		2,771,000		2,758,880		0.4%
Financial Ratios:
	Performance Ratios:
		Return on average assets	0.44%		9.90%		-95.6%		0.40%		2.98%		-86.6%
		Return on average common equity	3.00%		70.00%		-95.7%		2.61%		22.90%		-88.6%
		Net interest margin	3.92%		4.21%		-6.9%		4.16%		4.04%		3.0%
		Efficiency ratio	61.59%		64.23%		-4.1%		80.84%		83.78%		-3.5%
	Capital Adequacy Ratios (Period-end):
		Tier 1 leverage	16.00%		16.68%		-4.1%
		Tier 1 risk-based capital	19.25%		19.76%		-2.6%
		Total risk-based capital	20.50%		21.02%		-2.5%
Asset Quality Ratios:
	Allowance for loan and lease losses to total loans		1.80%		2.22%		-18.9%
	Allowance for loan and lease losses to nonperforming loans		110.91%		1171.73%		-90.5%
	Nonperforming loans to total loans		1.63%		0.19%		757.9%
	Nonperforming assets to total assets		1.16%		0.14%		728.6%
	Net charge-offs (recoveries) to average loans (annualized)		0.88%		-0.01%		-8900.0%		0.61%		-0.02%		-3150.0%
Asset Quality Measures:
	Nonaccrual loans (1)		165		$213		-22.5%
	Loans past due 90 days or more and still accruing		1,746		0		NA
	Other real estate owned		0		0		NA
		Total nonperforming assets	1,911		213		797.2%
	(1) Nonaccrual loans less than 30 days past due		165		213		-22.5%