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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


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© Marketwire 2013
2013-02-28 20:31:22 -

LOS ANGELES, CA -- (Marketwire) -- 02/28/13 -- 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 : ctt.marketwire.com/?release=991649&id=2684809&type=1& .. .



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
     non-
     performing
     assets     9,531      11,358   -16.09%

  (1) Nonaccrual
   loans
   less than
   30 days
   past due     5,611       6,143    -8.66%   





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



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