SOURCE: ProAmerica Bank

ProAmerica Bank

September 10, 2012 16:46 ET

ProAmerica Bank Reports 36% Increase in 2012 Second Quarter Earnings

LOS ANGELES, CA--(Marketwire - Sep 10, 2012) - ProAmérica Bank (OTCQB: PMRA) today reported results of operations for its second quarter ended June 30, 2012. The Bank reported net income of $199,000 for the second quarter of 2012, or 7 cents per share, as compared to net income of $146,000, or 5 cents per share, in the second quarter of 2011. For the first six months of 2012, the Bank reported net income of $437,000, or 16 cents per share, compared to net income of $170,000, or 6 cents per share, for the first six months of 2011. "We are pleased with the year over year 36% increase in net income as we continue developing our core earnings," stated L. Bruce Mills, Jr., President and CEO.

"ProAmérica Bank's strong performance in the second quarter stands in contrast to the economic performance experienced across the nation. The economy remained plagued by tepid hiring and sluggish growth in consumer spending during the second quarter," said Executive Chairwoman Maria Contreras-Sweet. She added, "ProAmérica achieved continued growth with a 13% increase in Total Assets, attesting to the strength of the ProAmérica value proposition and our team. We have expanded Total Loans and Deposits by 11% and 12%, respectively. With the addition of our new President and CEO, L. Bruce Mills, we anticipate continued momentum as we deliver success to our clients, community, and shareholders. The Board is pleased to see that Bruce has quickly embraced the vision and mission of the Bank."

2012 Second Quarter Highlights

  • Three-month Net Income of $199,000 -- an increase of $53,000, or 36% from the quarter ended June 30, 2011.

  • Total Assets at June 30, 2012 increased to $138.3 million, an increase of $16.0 million or 13% from June 30, 2011.

  • Total Loans at June 30, 2012 increased to $105.6 million, an increase of $10.7 million or 11% from June 30, 2011.

  • Total Deposits at June 30, 2012 increased to $115.1 million, an increase of $12.0 million or 12% from June 30, 2011.

  • Capital ratios are in excess of all minimums required to be "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage Ratio of 17.0% and a Total Risk-Based Capital Ratio of 20.3% at June 30, 2012. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital Ratio.

Financial Results
For the 2012 second quarter, net interest income before the provision for loan losses was flat compared to the 2011 second quarter. Net interest margin increased to 4.5% for the quarter ended June 30, 2012, down from 4.8% for the 2011 second quarter.

There was no provision for loan losses required in the second quarter of 2012 as compared to $87,000 in the second quarter 2011.

Noninterest income decreased $68,000, or 27% in 2012 versus 2011 as a result of a lower volume of SBA loans sold. Second quarter 2012 non-interest income included a $122,000 gain on the sale of SBA loans as compared to $188,000 in the same period of 2011.

Operating expenses for the 2012 second quarter were $1,392,000, compared with $1,430,000 for the 2011 second quarter. The decrease reflects lower stock option and occupancy expense, partially offset by higher salaries and benefit expense and other expense. The efficiency ratio was 85.4% for the 2012 second quarter, compared with 86.9% for the same period last year.

Loans, before the allowance for loan losses, grew 11 percent to $105.6 million at June 30, 2012 from $94.9 million at June 30, 2011. Other real estate owned increased to $3.9 million in the second quarter as a result of the foreclosure of a single loan in April 2012. The property is currently in escrow and is expected to close in the fourth quarter 2012. There was no other real estate owned in 2011.

Total deposits increased 12% to $115.1 million at June 30, 2012 from $103.0 million at June 30, 2011.

Asset Quality
Nonperforming assets (the sum of loans past due 90 days and accruing, nonaccrual loans and foreclosed properties) increased to 7.9% of total assets at June 30, 2012, compared with 1.0% at June 30, 2011. A majority of the nonaccrual loans are current and many are expected to return to accrual status by the end of 2012.

The allowance for loan losses was $2.9 million, or 2.7% of loans, at June 30, 2012, compared with $2.2 million, or 2.3% of loans, at June 30, 2011. Net loan charge-offs for the 2012 second quarter were 0.4% of loans, compared to 0.2% for the 2011 second quarter.

"Management believes the higher Allowance for Loan and Lease Losses is appropriate in light of the higher level of problem loans compared to the previous year; however, there is no assurance that additional adjustments to the allowance will not be required because of changes in economic conditions, regulatory requirements or other factors," said Mills. "We are working on reducing the level of nonperforming assets and expect to see a significant reduction by the end of the year."

Capital resources
Shareholders' equity rose to $22.1 million at June 30, 2012 from $18.8 million at June 30, 2011. The increase included $3,750,000 of preferred stock issued under the U.S. Treasury's Small Business Lending Fund in late 2011. The Bank's book value available to common shareholders per common share decreased to $6.67 at June 30, 2012 from $6.84 at June 30, 2011.

At June 30, 2012, the Bank's Tier 1 leverage capital ratio was 17.0% versus 16.0% at June 30, 2011. The total risk-based capital ratio was 20.3% as of June 30, 2012 as compared to 19.8% at June 30, 2011.

Mills concluded, "As we proceed into the second half of the year, our objectives are to continue to grow our low-cost deposit base, safely generate earning assets, reduce non-performing assets and maintain focus on our expense base. We remain steadfast in enhancing the value of the ProAmérica Bank franchise for our customers, employees and shareholders."

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)        
                   
                   
                   
    June 30,     June 30,     %  
    2012     2011     Change  
    Unaudited     Unaudited        
                       
Assets:                      
  Cash and Due From Banks   $ 3,254     $ 1,531     112.5 %
  Federal Funds Sold     22,230       17,395     27.8 %
  Interest-bearing Balances at Other Financial Institutions     2,930       8,661     -66.2 %
    Total Cash and Cash Equivalents     28,414       27,587     3.0 %
                         
  Loans Net of Deferred Loan Fees/Costs     105,609       94,945     11.2 %
  Allowance for Loan Losses     2,859       2,221     28.7 %
    Loans Net of Allowance for Loan Losses     102,750       92,724     10.8 %
Premises and Equipment, net     1,075       213     404.7 %
Federal Home Loan Bank Stock     515       418     23.2 %
Other Real Estate Owned     3,936       0     NA  
Accrued Interest Receivable and Other Assets     1,619       1,398     15.8 %
                       
    Total Assets   $ 138,309     $ 122,340     13.1 %
                       
Liabilities:                      
  Non-Interest-Bearing Demand Deposits   $ 39,836     $ 38,013     4.8 %
                       
  Interest-Bearing Demand Deposits (NOW Deposits)     3,799       5,004     -24.1 %
  Savings and Money Market     24,312       18,597     30.7 %
  Certificates of Deposit     47,103       41,409     13.8 %
    Total Interest-Bearing Deposits     75,214       65,010     15.7 %
    Total Deposits     115,050       103,023     11.7 %
                       
  Other Borrowings     0       0     0.0 %
  Accrued Interest Payable and Other Liabilities     1,149       514     123.5 %
                       
Total Liabilities     116,199       103,537     12.2 %
                       
Shareholders' Equity:                      
  Common Stock     27,248       27,245     0.0 %
  Additional Paid in Capital     1,713       1,595     7.4 %
  Accumulated Deficit     (10,601 )     (10,037 )   5.6 %
  SBLF Preferred Stock     3,750       0     NA  
    Total Shareholders' Equity     22,110       18,803     17.6 %
                           
    Total Liabilities and Shareholders' Equity   $ 138,309     $ 122,340     13.1 %
                           
    Tier 1 leverage     17.0 %     16.0 %      
    Tier 1 risk-based capital     19.0 %     18.5 %      
    Total risk-based capital     20.3 %     19.8 %      
                             
       
PROAMÉRICA BANK STATEMENT OF OPERATIONS      
For the Periods Indicated      
(Dollars in thousands except per share data)      
                             
    Three Months     Six Months  
For The Period Ended June 30,   2012   2011   % Change     2012   2011   % Change  
    Unaudited   Unaudited         Unaudited   Unaudited      
                                     
Interest Income:                                    
  Interest and Fees on Loans   $ 1,484   $ 1,482   0.1 %   $ 3,038   $ 2,832   7.3 %
  Interest on Federal Funds Sold     10     9   11.1 %     17     22   -22.7 %
  Interest on Balances at Other Financial Institutions     9     22   -59.1 %     25     44   -43.2 %
  Dividends on FHLB and PCBB Stock     4     0   NA       5     0   NA  
    Total Interest Income     1,507     1,513   -0.4 %     3,085     2,898   6.5 %
                                     
Interest Expense:                                    
  Interest on Deposit Accounts     99     100   -1.0 %     200     187   7.0 %
                                       
  Net Interest Income     1,408     1,413   -0.4 %     2,885     2,711   6.4 %
                                     
Provision for Loan Losses     0     87   -100.0 %     0     266   -100.0 %
                                     
  Net Interest Income After Provision for Loan Losses     1,408     1,326   6.2 %     2,885     2,445   18.0 %
                                     
Non-Interest Income:                                    
    Non-Interest Income     183     251   -27.1 %     331     504   -34.3 %
                                     
Non-Interest Expense:                                    
  Salaries and Employee Benefits     842     813   3.6 %     1,694     1,589   6.6 %
  Stock Based Compensation Expense     7     80   -91.3 %     18     147   -87.8 %
  Occupancy Expense     147     224   -34.4 %     271     445   -39.1 %
  Operating Expense     396     313   26.5 %     796     597   33.3 %
      Total Non-Interest Expense     1,392     1,430   -2.7 %     2,779     2,778   0.0 %
                                     
  Pre-tax Income     199     147   35.4 %     437     171   155.6 %
                                     
Provision for Income Taxes     0     1   -100.0 %     0     1   -100.0 %
                                     
  Net Income   $ 199   $ 146   36.3 %   $ 437   $ 170   157.1 %
                                     
  Earnings per share - basic and diluted earnings per share   $ 0.07   $ 0.05   36.3 %   $ 0.16   $ 0.06   157.0 %
                                     
                             
       
PROAMÉRICA BANK FINANCIAL HIGHLIGHTS      
For the Periods Indicated      
(Dollars in thousands except per share data)      
                             
    Three Months     Six Months  
For The Period Ended June 30,   2012   2011   % Change     2012   2011   % Change  
    Unaudited   Unaudited         Unaudited   Unaudited      
Per Share:                                    
  Net income, basic and diluted   $ 0.07   $ 0.05   36.3 %   $ 0.16   $ 0.06   157.0 %
  Book value - Common   $ 6.67   $ 6.84   -2.5 %                  
                                     
Common Shares Outstanding                                    
  End of period     2,751,000     2,750,000   0.0 %     2,751,000     2,750,000   0.0 %
  Average for period     2,750,418     2,750,000   0.0 %     2,750,209     2,750,000   0.0 %
                                     
Financial Ratios:                                    
  Performance Ratios:                                    
    Return on average assets     0.6 %   0.5 % 20.0 %     0.7 %   0.3 % 133.3 %
    Return on average common equity     5.3 %   3.1 % 71.0 %     4.8 %   1.8 % 166.7 %
    Net interest margin     4.5 %   4.8 % -6.3 %     4.5 %   4.7 % -4.3 %
    Efficiency ratio     85.4 %   86.9 % -1.7 %     86.4 %   86.4 % 0.0 %
                                     
  Capital Adequacy Ratios (Period-end):                                    
    Tier 1 leverage     17.0 %   16.0 % 6.3 %                  
    Tier 1 risk-based capital     19.0 %   18.5 % 2.7 %                  
    Total risk-based capital     20.3 %   19.8 % 2.5 %                  
                                     
Asset Quality Ratios:                                    
  Allowance for loan and lease losses to:                                    
    Total loans     2.7 %   2.3 % 17.4 %                  
    Nonaccrual loans     41.1 %   187.0 % -78.0 %                  
  Nonperforming assets to:                                    
    Total loans and other real estate owned     9.9 %   1.3 % 661.5 %                  
    Total assets     7.9 %   1.0 % 690.0 %                  
  Net charge-offs (recoveries) to average loans (annualized)     0.8 %   0.0 % NA       0.4 %   0.2 % 100.0 %
                                     
Asset Quality Measures:                                    
  Classified assets:                                    
    Loans   $ 10,375   $ 9,928   4.5 %                  
    Other real estate owned     3,936     0   NA                    
  Nonaccrual loans     6,961     1,187   486.4 %                  
  Nonaccrual loans less than 30 days past due     6,910     1,136   508.3 %                  

Contact Information

  • Contact:
    ProAmerica Bank
    Maria Contreras-Sweet
    Chairwoman
    213.787.2802

    L. Bruce Mills, Jr.
    CEO / President
    213.787.2803

    Frank E. Smith
    CFO
    213.787.2804