ProAmerica Bank Reports Third Quarter Results of Operations

LOS ANGELES, CA--(Marketwired - Nov 2, 2015) -  ProAmérica Bank (OTCQB: PMRA) today reported Net Income of $339,000 for the three months ended September 30, 2015, or $0.11 per diluted common share compared to Net Income of $185,000, or $0.07 per diluted common share for the three months ended September 30, 2014. Total Assets at September 30, 2015 were $211.1 million, an increase of $49.7 million or 31% as compared to September 30, 2014. "Our growth and earnings reflect our focused approach to developing new business and expanding existing relationships. We are pleased with the growth," stated Sal Varela, Interim President and CEO. "These results are very positive and reflect the team's efforts and commitment to growing our business," said Chairwoman Maria S. Salinas. 

2015 Third Quarter Highlights

• Three-month Operating Income (income before taxes and provision for loan losses) of $563,000, compared to Operating Income of $313,000 in the prior year third quarter, an increase of $250,000. 
  
  
• Total Assets at September 30, 2015 were $211.1 million, an increase of $49.7 million or 31% from September 30, 2014. Temporary deposits resulted in $18.0 million of the $49.7 million increase in Total Assets.
  
  
• Total Loans at September 30, 2015 were $133.7 million, an increase of $12.6 million or 10% from September 30, 2014. The increase included temporary draws on lines of credit totaling $5.0 million.
  
  
• Total Deposits at September 30, 2015 were $181.2 million, an increase of $49.3 million or 37% from September 30, 2014. Deposits at September 30, 2015 included $18.0 million in temporary deposits from clients, contributing to the increase.
  
  
• Shareholders' Equity increased $0.9 million, or 3%, to $28.8 million at September 30, 2015, an increase from $27.9 million at September 30, 2014.
  
  
• Nonperforming assets were $563,000 at September 30, 2015, an increase from $174,000 at September 30, 2014, representing 0.27% 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 14.9% and a Total Risk-Based Capital Ratio of 19.3% at September 30, 2015. 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 September 30, 2015 was $339,000, compared to Net Income of $185,000 for the same period in 2014. Net Income for the nine months ended September 30, 2015 was $466,000, compared to Net Income of $444,000 for the same period in 2014. Operating Income was $563,000 for the third quarter of 2015, as compared to Operating Income of $313,000 for the same period in 2014. Operating Income was $778,000 for the nine-month period ended September 30, 2015, as compared to Operating Income of 755,000 for the same period in 2014. 

Net Interest Income before the Provision for Loan Losses decreased by $66,000 for the third quarter of 2015 compared to the 2014 third quarter. The Net Interest Margin decreased to 3.43% for the quarter ended September 30, 2015, compared to 4.26% for the same period of 2014. For the nine-month period ended September 30, 2015, Net Interest Income before the Provision for Loan Losses increased by $73,000 compared to the same period in 2014. The Net Interest Margin decreased to 3.95% for the nine-month period ended September 30, 2015 as compared to 4.33% for the same period in 2014. The third quarter of 2014 included the receipt of $60,000 in interest income recovered on loans previously on nonaccrual status. Net interest income for the first nine months of 2015 included $171,000 of interest income recovered on loans previously on nonaccrual status compared to $95,000 for the same period in 2014. The decrease in the net interest margin in 2015 was due to an increase in average Federal funds sold, a lower-yielding earning asset, and a lower yield on commercial real estate loans.

No Provisions for Loan Losses were required in the three and nine-month periods ended September 30 in 2015 and 2014 which reflects the quality of the Bank's loan portfolio.

Noninterest Income decreased by $118,000, or 25% in the third quarter of 2015 versus the third quarter of 2014 due to a decrease in the Bank Enterprise Award granted to the Bank and decreased gains on the sales of SBA loans. The Bank Enterprise Award resulted from the Bank's lending performance in lower income census tracts in 2014 and 2015. The Award was the maximum that any bank received for 2015, and the decreased grant was not due to a decline in lending performance in the lower income census tracts. Noninterest Income decreased $315,000, or 39% for the nine months ended September 30, 2015 versus the same period in 2014 due to decreased gains on sales of SBA loans and the decrease in the Bank Enterprise Award.

Noninterest Expense for the third quarter 2015 was $1,370,000, compared with $1,804,000 for the 2014 third quarter, a decrease of $434,000. The efficiency ratio was 71% for the 2015 third quarter, compared with 85% for the same period in 2014. Noninterest Expense for the nine months ended September 30, 2015 was $4.6 million, compared with $4.9 million for the same period in 2014. The efficiency ratio was 86% for the 2015 nine-month period, compared with 87% for the same period last year. Prior year third quarter and nine-month period Noninterest Expense was negatively impacted by the recognition of a $331,000 contingent liability arising from the guarantee of credit card balances related to one of the Bank's troubled clients. 

Cash and Cash Equivalents increased by $38.0 million from the third quarter of 2014 to 2015. Loans, before the allowance for loan losses, increased 10% to $133.7 million at September 30, 2015, compared to $121.0 million at September 30, 2014.

Total Deposits increased 37%, to $181.2 million at September 30, 2015, as compared to $131.9 million at September 30, 2014. Deposits at September 30, 2015 included $18.0 million in temporary deposits from clients, contributing to the increase. 

Asset Quality
Nonperforming Assets were $563,000, or 0.3% of Total Assets at September 30, 2015, compared with $174,000, or 0.1% of Total Assets at September 30, 2014. The Allowance for Loan Losses was $2.2 million, or 1.6% of loans, at September 30, 2015, compared with $2.0 million, or 1.7% of loans, at September 30, 2014. Net recoveries to average loans outstanding were 0.12% in the third quarter of 2015 compared to net charge-offs of 1.58% for the same period in 2014.

Capital Resources
Total Shareholders' Equity increased to $28.8 million at September 30, 2015, as compared to $27.9 million at September 30, 2014. The Bank's book value available to common shareholders per common share increased to $8.82 at September 30, 2015, as compared to $8.71 at September 30, 2014. 

The Bank's Tier 1 Leverage Capital Ratio was 14.9% at September 30, 2015, versus 16.5% at September 30, 2014. The Total Risk-based Capital Ratio was 19.3% as of September 30, 2015, as compared to 20.1% at September 30, 2014. The Common Equity Tier One Capital Ratio, a new regulatory ratio under Basel III (Basel Committee on Bank Supervision guidelines for determining regulatory capital), was 16.0% at September 30, 2015. The Common Equity Tier One Capital Ratio was not in effect, and therefore, not calculated at September 30, 2014. All capital ratios are well above regulatory requirements for a well-capitalized institution under the new requirements effective January 1, 2015.

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, Third 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)
				Sep 30,				Sep 30,				%
				2015				2014				Change
				Unaudited				Unaudited
Assets:
	Cash and Due From Banks			$	1,618			$	1,355			19.4	%
	Federal Funds Sold				63,675				24,500			159.9	%
	Interest-bearing Balances at Other Financial Institutions				9,080				10,501			-13.5	%
		Total Cash and Cash Equivalents			74,373				36,356			104.6	%
	Loans Net of Deferred Loan Fees/Costs				133,673				121,043			10.4	%
	Allowance for Loan Losses				2,187				2,036			7.4	%
		Loans Net of Allowance for Loan Losses			131,486				119,007			10.5	%
	Premises and Equipment, net				680				800			-15.0	%
	Federal Home Loan Bank Stock				599				560			7.0	%
	Other Real Estate Owned				0				0			NA
	Accrued Interest Receivable and Other Assets				3,956				4,634			-14.6	%
		Total Assets		$	211,094			$	161,357			30.8	%
Liabilities:
	Noninterest-bearing Demand Deposits			$	47,799			$	28,572			67.3	%
	Interest-bearing Demand Deposits (NOW Deposits)				3,470				4,979			-30.3	%
	Savings and Money Market				41,218				31,556			30.6	%
	Certificates of Deposit				88,679				66,771			32.8	%
		Total Interest-bearing Deposits			133,367				103,306			29.1	%
		Total Deposits			181,166				131,878			37.4	%
	Other Borrowings				0				0			NA
	Accrued Interest Payable and Other Liabilities				1,162				1,585			-26.7	%
Total Liabilities					182,328				133,463			36.6	%
Shareholders' Equity:
	Common Stock				27,503				27,308			0.7	%
	Additional Paid in Capital				1,986				1,956			1.5	%
	Accumulated Deficit				(4,473	)			(5,120	)		-12.6	%
	SBLF Preferred Stock				3,750				3,750			0.0	%
		Total Shareholders' Equity			28,766				27,894			3.1	%
		Total Liabilities and Shareholders' Equity		$	211,094			$	161,357			30.8	%
		Tier 1 leverage			14.94	%			16.53	%
		Common equity tier 1 capital			16.02	%			NA
		Tier 1 risk-based capital			18.05	%			18.81	%
		Total risk-based capital			19.31	%			20.07	%

PROAMÉRICA BANK STATEMENT OF OPERATIONS
For the Periods Indicated
(Dollars in thousands except per share data)
			Three Months									Nine Months
For The Period Ended Sep 30,			2015			2014			% Change			2015			2014			% Change
			Unaudited			Unaudited						Unaudited			Unaudited
Interest Income:
	Interest and Fees on Loans		$	1,687		$	1,716		-1.7	%		$	5,163		$	5,057		2.1	%
	Interest on Federal Funds Sold			26			14		85.7	%			50			38		31.6	%
	Interest on Balances at Other Financial Institutions			14			16		-12.5	%			49			40		22.5	%
	Dividends on FHLB and PCBB Stock			15			10		50.0	%			61			32		90.63	%
		Total Interest Income		1,742			1,756		-0.8	%			5,323			5,167		3.0	%
Interest Expense:
	Interest on Deposit Accounts			165			113		46.0	%			419			336		24.7	%
		Net Interest Income		1,577			1,643		-4.0	%			4,904			4,831		1.5	%
Provision for Loan Losses				0			0		NA				0			0		NA
	Net Interest Income After Provision for Loan Losses			1,577			1,643		-4.0	%			4,904			4,831		1.5	%
Noninterest Income:
	Gain on Sale of SBA Loans			10			44		-77.3	%			10			232		-95.7	%
	Noninterest Income			346			430		-19.5	%			479			572		-16.3	%
		Total Non-Interest Income		356			474		-24.9	%			489			804		-39.2	%
Noninterest Expense:
	Salaries and Employee Benefits			800			870		-8.0	%			2,839			2,858		-0.7	%
	Stock Based Compensation Expense			0			14		-100.0	%			56			74		-24.3	%
	Occupancy Expense			155			152		2.0	%			462			450		2.7	%
	Operating Expense			415			768		-46.0	%			1,258			1,498		-16.0	%
		Total Non-Interest Expense		1,370			1,804		-24.1	%			4,615			4,880		-5.4	%
	Pre-tax Income			563			313		79.9	%			778			755		3.0	%
Provision for Income Taxes				224			128		NA				312			311		NA
	Net Income		$	339		$	185		83.2	%		$	466		$	444		5.0	%
	Earnings Per Share - Basic		$	0.12		$	0.07		76.0	%		$	0.16		$	0.16		-1.7	%
	Earnings Per Share - Diluted		$	0.11		$	0.07		75.0	%		$	0.15		$	0.16		-2.3	%

PROAMÉRICA BANK FINANCIAL HIGHLIGHTS

For the Periods Indicated

(Dollars in thousands except per share data)

				Three Months										Nine Months
For The Period Ended Sep 30,				2015				2014				% Change		2015				2014				% Change
				Unaudited				Unaudited						Unaudited				Unaudited
Per Share:
	Net income - basic			$	0.12			$	0.07			76.0	%	$	0.16			$	0.16			-1.7	%
	Net income - diluted			$	0.11			$	0.07			75.0	%	$	0.15			$	0.16			-2.3	%
	Book value - Common			$	8.82			$	8.71			1.3	%
Common Shares Outstanding
	End of period				2,836,000				2,771,000			2.3	%		2,771,000				2,771,000			0.0	%
	Average for period				2,801,380				2,771,000			1.1	%		2,781,127				2,771,000			0.4	%
Financial Ratios:
	Performance Ratios:
		Return on average assets			0.73	%			0.47	%		55.3	%		0.37	%			0.39	%		-5.1	%
		Return on average common equity			5.48	%			3.09	%		77.3	%		2.53	%			2.48	%		2.0	%
		Net interest margin			3.43	%			4.26	%		-19.5	%		3.95	%			4.33	%		-8.8	%
		Efficiency ratio			70.87	%			85.21	%		-16.8	%		85.57	%			86.60	%		-1.2	%
	Capital Adequacy Ratios (Period-end):
		Tier 1 leverage			14.94	%			16.53	%		-9.6	%
		Common equity tier 1 capital			16.02	%			N/A			N/A
		Tier 1 risk-based capital			18.05	%			18.81	%		-4.0	%
		Total risk-based capital			19.31	%			20.07	%		-3.8	%
Asset Quality Ratios:
	Allowance for loan and lease losses to total loans				1.64	%			1.68	%		-2.4	%
	Allowance for loan and lease losses to nonperforming loans				388.69	%			1165.92	%		-66.7	%
	Nonperforming loans to total loans				0.42	%			0.14	%		200.0	%
	Nonperforming assets to total assets				0.27	%			0.11	%		145.5	%
	Net charge-offs (recoveries) to average loans (annualized)				-0.12	%			1.58	%		-107.6	%		-0.07	%			0.52	%		-113.5	%
Asset Quality Measures:
	Nonaccrual loans (1)				563				174			223.6	%
	Other real estate owned				0				0			NA
		Total nonperforming assets			563				174			223.6	%
	(1) Nonaccrual loans less than 30 days past due				563				174			223.6	%