SOURCE: Promerica Bank

Promerica Bank

January 31, 2011 18:02 ET

PROMERICA BANK Fourth Quarter 2010 Results Reflect Earnings, Strong Capitalization and Growth

LOS ANGELES, CA--(Marketwire - January 31, 2011) - PROMÉRICA BANK (OTCBB: PMRA) today reported results of operations for its fourth quarter ended December 31, 2010. Highlights include:

--  The Bank recorded its first-ever quarterly profit from operations.

--  Capital ratios remain well in excess of all minimums required to be
    "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage
    Ratio of 15.8% and a Total Risk-Based Capital Ratio of 22.3% at
    December 31, 2010. Regulatory "Well Capitalized" definitions are 5%
    for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital
    Ratio.

--  Total Assets at December 31, 2010 grew to $116.8 million, an increase
    of $21.4 million or 22% from December 31, 2009.

--  Total Deposits at December 31, 2010 grew to $97.8 million, an increase
    of $21.6 million or 28% from December 31, 2009.

--  Total Loans at December 31, 2010 grew to $81.2 million, an increase of
    $7.2 million or 8% from December 31, 2009.

PROMÉRICA BANK reported net income of $18,000 for the fourth quarter of 2010 ($0.01 per share) as compared to a net loss of $1,359,000 ($0.49 per share) in the fourth quarter of 2009. The Bank reported a net loss of $506,000 ($0.18 per share) for the year ended December 31, 2010 as compared to a loss of $2,754,000 ($1.00 per share) for the year ended December 31, 2009. The results for the year ended December 31, 2009 included the successful resolution of a lawsuit with a payment of $1.1 million to the Bank in September 2009. The 2010 results include gains on the sale of SBA loans totaling $0 and $206,000 for the three and twelve-month periods, respectively.

The Allowance for Loan and Lease Losses represents 2.5% of total loans at December 31, 2010. Nonperforming assets, net of government guaranteed loans, totaled approximately $1.2 million, or 1.0% of assets at December 31, 2010.

"We are pleased to announce PROMÉRICA BANK's first quarterly profit from operations. Our year-over-year 28% growth in deposits was especially impressive in light of the weak economy. Our strong Board and Management have continued to complement each other and work in unison to overcome the recessionary challenges and build our franchise," stated Maria Contreras-Sweet, Executive Chairwoman of PROMÉRICA BANK. "Funding business growth is critical to economic recovery. Nationwide, commercial and industrial loans finally inched upward during the final two months of 2010 after nearly two straight years of declines according to the Federal Reserve. And while lending was in decline for nearly all of 2010, PROMÉRICA's lending continued to show improvements with an 8% growth for the year.

"Our continued growth in our core markets is a result of the excellent client service our highly professional team provides. At all levels of the organization, we strive to give our clients a market advantage through our strong banking partnership. Our paramount goal remains helping our clients grow and expand their organizations to build wealth for their families and the community," stated John H. Quinn, President and CEO of PROMÉRICA BANK. "With strong capital ratios and maximum allowable FDIC insurance, we offer our clients security. And with strength and stability, we remain an attractive financial partner for the businesses we serve in the community of Los Angeles."

PROMÉRICA BANK provides a full range of financial services, including credit and deposit products, cash management, and internet banking for businesses and high net worth individuals from its headquarters office at 888 S. Figueroa Street, Los Angeles, CA 90017. Information on products and services may be obtained by calling (213) 613-5000 or visiting the Bank's website at www.PROMERICAbank.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 PROMÉRICA 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: PROMÉRICA 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 PROMÉRICA 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 PROMÉRICA BANK does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

                              PROMÉRICA BANK
                              BALANCE SHEETS
                          (Dollars in thousands)



                                 December 31,  September 30,  December 31,
                                     2010          2010           2009
                                 ------------  -------------  ------------
                                   Unaudited     Unaudited      Audited

Assets:
  Cash and Due From Banks        $      1,195  $         824  $      3,930
  Federal Funds Sold                   25,145         28,650        11,875
  Time Deposits in Other
   Financial Institutions               9,181          9,659         3,841
                                 ------------  -------------  ------------
     Total Cash and Cash
      Equivalents                      35,521         39,133        19,646
                                 ------------  -------------  ------------

  Loans Net of Deferred Loan
   Fees/Costs                          81,168         73,992        75,315
  Allowance for Loan Losses             2,058          2,051         2,030
                                 ------------  -------------  ------------
     Loans Net of Allowance for
      Loan Losses                      79,110         71,941        73,285
 Premises and Equipment, net              408            496           788
 Federal Home Loan Bank Stock             364            364           232
 Other Real Estate Owned                    0            357             0
 Accrued Interest Receivable and
  Other Assets                          1,352          1,345         1,403
                                 ------------  -------------  ------------

    Total Assets                 $    116,755  $     113,636  $     95,354
                                 ------------  -------------  ------------

Liabilities:
  Non-Interest-Bearing Demand
   Deposits                      $     39,667  $      26,443  $     17,134

  Interest-Bearing Demand
   Deposits (NOW Deposits)              5,187         14,447         2,963
  Savings and Money Market             15,811         14,591        13,834
  Certificates of Deposit              37,092         38,906        42,245
                                 ------------  -------------  ------------
    Total Interest-Bearing
     Deposits                          58,090         67,944        59,042
                                 ------------  -------------  ------------
    Total Deposits                     97,757         94,387        76,176

  Other Borrowings                          0            293             0
  Accrued Interest Payable and
   Other Liabilities                      512            556           464
                                 ------------  -------------  ------------

Total Liabilities                      98,269         95,236        76,640

Shareholders' Equity:
  Common Stock                         27,245         27,245        27,245
  Additional Paid in Capital            1,448          1,381         1,170
  Accumulated Deficit                 (10,207)       (10,226)       (9,701)
                                 ------------  -------------  ------------
    Total Shareholders' Equity         18,486         18,400        18,714
                                 ------------  -------------  ------------

    Total Liabilities and
     Shareholders' Equity        $    116,755  $     113,636  $     95,354
                                 ------------  -------------  ------------

Tier 1 Leverage Ratio                    15.8%          16.5%         21.0%
Tier 1 Risk-based Capital Ratio          21.0%          22.3%         25.0%
Total Risk-based Capital Ratio           22.3%          23.5%         26.2%




                              PROMÉRICA BANK
                         STATEMENTS OF OPERATIONS
                          For the Quarters Ended
               (Dollars in thousands except per share data)




                                                December 31,  December 31,
                                                    2010          2009
                                                ------------  ------------
                                                  Unaudited     Unaudited

Interest Income:
  Interest and Fees on Loans                    $      1,324  $      1,203
  Interest on Federal Funds Sold                          17             5
  Interest on Balances at Other Financial
   Institutions                                           29            18
                                                ------------  ------------
    Total Interest Income                              1,370         1,226

Interest Expense:
  Interest on Deposit Accounts                           103           138
                                                ------------  ------------

  Net Interest Income                                  1,267         1,088

Provision for Loan Losses                                  0         1,181
                                                ------------  ------------

  Net Interest Income After Provision
   for Loan Losses                                     1,267           (93)

Non-Interest Income:
  Non-Interest Income                                     73            30

Non-Interest Expense:
  Salaries and Employee Benefits                         720           713
  Stock Based Compensation Expense                        67            68
  Occupancy Expense                                      229           226
  Operating Expense                                      306           288
                                                ------------  ------------
     Total Non-Interest Expense                        1,322         1,295
                                                ------------  ------------

  Pre-tax Income (Loss)                                   18        (1,358)

Provision for Income Taxes                                 0             1
                                                ------------  ------------

  Net Income (Loss)                             $         18  $     (1,359)
                                                ------------  ------------

  Net Income (Loss) per share - basic and
   diluted loss per share                       $       0.01  $      (0.49)
                                                ------------  ------------




                              PROMÉRICA BANK
                         STATEMENTS OF OPERATIONS
                      For the Years Ended December 31
                (Dollars in thousands except per share data)


                                                    2010          2009
                                                ------------  ------------
                                                  Unaudited      Audited

Interest Income:
  Interest and Fees on Loans                    $      4,800  $      4,156
  Interest on Federal Funds Sold                          58            16
  Interest on Balances at Other Financial
   Institutions                                          112            88
  Dividends on FHLB and PCBB Stock                         1             0
                                                ------------  ------------
    Total Interest Income                              4,971         4,260

Interest Expense:
  Interest on Deposit Accounts                           482           578
                                                ------------  ------------

  Net Interest Income                                  4,489         3,682

Provision for Loan Losses                                 62         2,371
                                                ------------  ------------

  Net Interest Income After Provision
   for Loan Losses                                     4,427         1,311

Non-Interest Income:
  Non-Interest Income                                    338         1,234

Non-Interest Expense:
  Salaries and Employee Benefits                       2,772         2,977
  Stock Based Compensation Expense                       278           267
  Occupancy Expense                                      891           911
  Operating Expense                                    1,329         1,143
                                                ------------  ------------
    Total Non-Interest Expense                          5270          5298
                                                ------------  ------------

  Pre-tax Loss                                          (505)       (2,753)

Provision for Income Taxes                                 1             1
                                                ------------  ------------

  Net Loss                                      $       (506) $     (2,754)
                                                ------------  ------------

  Net Loss per share - basic and diluted loss
   per share                                    $      (0.18) $      (1.00)
                                                ------------  ------------

Contact Information

  • Contact:

    Promerica Bank

    Maria Contreras-Sweet
    Executive Chairwoman
    213.787.2802

    John H. Quinn
    CEO / President
    213.787.2803

    Frank E. Smith
    CFO
    213.787.2804