Private Bancorp of America, Inc. Reports Third Quarter Results


  • Total Assets increased to a record $999.9 million up 6% from the prior quarter and 33% year-over-year.
  • Net loans increased to $813.1 million up 3% for the quarter and 41% year-over-year.
  • Deposits increased to $824 million up 13% for the quarter and 50% year-over-year.
  • Record net interest income for the quarter was $11.0 million, up 9% for the quarter and 47% year-over-year.
  • Earnings were impacted by the $9.5 million charge-off detailed in the press release dated September 16, 2019. The after-tax impact of charge ($6.7 million or $1.19 per diluted share) is reflected in net income reported for the quarter and year to date.

LA JOLLA, Calif., Oct. 21, 2019 (GLOBE NEWSWIRE) -- Private Bancorp of America, Inc. (OTCQX:PBAM) (“Company”), parent company of CalPrivate Bank (“Bank”), announced unaudited financial results for the quarter ended September 30, 2019. Net loss for the third quarter of 2019 was $5.0 million, or $0.89 per diluted share, compared with net income of $1.1million, or $0.20 per diluted share for the second quarter of 2019 and $1.1 million, or $0.21 per diluted share for the third quarter of 2018. Third quarter results include a charge-off of $9.5 million ($6.7 million after taxes) or $1.19 per diluted share.

Tom Wornham, President and CEO of PBAM and CEO of the Bank said, “PBAM continues to execute on our organic growth strategy. The third quarter results reflect the efforts of our team members producing record levels of revenue, assets, loans and deposits.

Rick Sowers, President of the Bank, added, “Despite the unfortunate credit loss we recorded in the quarter, the Bank continues to execute on our three year growth plan. The team continues to build lasting relationships with our customers and communities, enhancing shareholder value.”

Net interest income for the third quarter of 2019 was $11 million compared with $10.1 million in the second quarter of 2019. Interest and fees on loans increased $1.1 million, or 9.2% from the prior quarter due to increases in average loan balances. Total interest expense increased $177 thousand or 8.5% from the prior quarter due to increased deposit costs and borrowing balances. Net interest margin was 4.67% for the third quarter of 2019 compared with 4.70% in the second quarter of 2019. The net interest margin, adjusted for interest reversed from the loan charge-off, was 4.73% for the third quarter compared with 4.70% in the second quarter of 2019.

The provision for loan loss expense was $9.7 million in the third quarter of 2019 compared with $1.0 million in the second quarter of 2019. The increased provision expense for the quarter was due a specific charge-off of $9.5 million and growth in the loan portfolio. The Allowance for Loan Losses increased to $7.9 million or 0.96% of total loans. 

Non-interest income for the third quarter of 2019 was $584 thousand compared with $606 thousand in the second quarter of 2019. The third quarter included $125 thousand in gains from the sale of investment securities and $163 thousand in gains from SBA loan sales.

Non-interest expense for the third quarter of 2019 was $8.9 million compared with $8.2 million for the second quarter of 2019. Non-interest expense increased due to increases in salaries and benefits, and increased professional fees, related to legal expenses, partially offset by a decrease in other expense. “We are pleased with growth in all of our geographic locations. Our clients continue to support us throughout our Southern California coastal footprint. Our team members remain committed to providing best in class solutions and service to our clients. We remain committed to providing our shareholders with solid long-term returns.” said Selwyn Isakow, Chairman of PBAM and the Bank.

About Private Bancorp of America, Inc.

Private Bancorp of America, Inc. (OTCQX: PBAM), is the holding company for CalPrivate Bank. CalPrivate Bank provides a Distinctly Different banking experience through unparalleled service and creative funding solutions to high net worth individuals, professionals, locally owned businesses and real estate entrepreneurs. Customers are serviced through offices in Coronado, San Diego, La Jolla, Newport Beach, El Segundo and Beverly Hills as well as efficient electronic banking offerings. The Bank also offers various portfolio and government guaranteed lending programs, including SBA and cross-border Export-Import Bank programs. CalPrivate Bank is a SBA Preferred Lender and a Bauer Financial 5 star rated bank, as well as being in the Top 200 safest Banks as rated by Deposits.com.

Investor Relations Contact

Thomas V. Wornham
President/CEO
Private Bancorp of America, Inc.
(858) 875-6900

Safe Harbor Paragraph

This press release includes forward-looking statements that involve inherent risks and uncertainties. Private Bancorp of America, Inc. cautions readers that a number of important factors could cause actual results to differ materially from those in the forwardlooking statements. These factors include loan losses, economic conditions and competition in the geographic and business areas in which Private Bancorp of America, Inc. operates, our ability to successfully integrate and develop business through the addition of new personnel and facilities and merged banks, whether our efforts to expand loan, product and service offerings will prove profitable, the effects of the bank mergers and acquisitions in our markets, system failures and internet security, inflation, fluctuations in interest rates, legislation and governmental regulation. You should not place undue reliance on forwardlooking statements and we undertake no obligation to update those statements whether as a result of changes in underlying factors, new information, future events or otherwise.

 
PRIVATE BANCORP OF AMERICA, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in thousands)
          
 September 30, 2019 June 30, 2019 Dollar changePercentage change September 30, 2018 Dollar changePercentage change
Assets           
            
Cash and due from banks$29,480  $25,737  $3,743 14.5% $24,273  $5,207 21.5%
Interest-bearing deposits at Federal Reserve Bank 58,373   17,346   41,027 236.5%  33,061   25,312 76.6%
Total cash and due from banks 87,853   43,083   44,770 103.9%  57,334   30,519 53.2%
Interest-bearing time deposits with other institutions 2,255   2,254   1 0.0%  2,749   (494)-18.0%
Investment securities available for sale 73,209   84,752   (11,543)-13.6%  99,217   (26,008)-26.2%
Loans 820,989   795,345   25,644 3.2%  582,292   238,697 41.0%
Allowance for loan losses (7,893)  (7,637)  (256)3.4%  (5,389)  (2,504)46.5%
Net loans 813,096   787,708   25,388 3.2%  576,903   236,193 40.9%
Federal Home Loan Bank stock, at cost 4,060   4,060   - 0.0%  2,889   1,171 40.5%
Right of use asset 6,877   7,271   (394)-5.4%  -   6,877 NM 
Premises and equipment, net 2,947   2,669   278 10.4%  2,067   880 42.6%
Other intangible assets 978   904   74 8.2%  789   189 24.0%
Deferred tax asset 4,576   4,409   167 3.8%  4,852   (276)-5.7%
Accrued interest receivable 2,569   2,731   (162)-5.9%  851   1,718 201.9%
Other assets 1,565   706   859 121.7%  2,311   (746)-32.3%
Total assets$ 999,985  $ 940,547  $ 59,438 6.3% $ 749,962  $ 250,023 33.3%
            
Liabilities and Shareholders' Equity           
            
Liabilities           
Noninterest bearing$266,205  $247,153  $19,052 7.7% $180,657  $85,548 47.4%
Interest Bearing 557,800   485,011   72,789 15.0%  368,462   189,338 51.4%
Total deposits 824,005   732,164   91,841 12.5%  549,119   274,886 50.1%
FHLB borrowings 55,000   82,000   (27,000)-32.9%  107,000   (52,000)-48.6%
Other borrowings 17,930   17,929   1 0.0%  7,906   10,024 126.8%
Accrued interest payable and other liabilities 9,779   10,599   (820)-7.7%  4,046   5,733 141.7%
Total liabilities 906,714   842,692   64,022 7.6%  668,071   238,643 35.7%
            
Shareholders' equity           
Common stock 68,804   68,740   64 0.1%  58,242   10,562 18.1%
Additional paid-in capital 2,997   2,823   174 6.2%  2,791   206 7.4%
Retained earnings 20,917   25,997   (5,080)-19.5%  22,318   (1,401)-6.3%
Accumulated other comprehensive income 553   295   258 87.5%  (1,460)  2,013 -137.9%
Total stockholders' equity 93,271   97,855   (4,584)-4.7%  81,891   11,380 13.9%
            
Total liabilities and stockholders' equity$ 999,985  $ 940,547  $ 59,438 6.3% $ 749,962  $ 250,023 33.3%


CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
          
 For the three months ended
 September 30, 2019 June 30, 2019 Dollar changePercentage change September 30, 2018 Dollar changePercentage change
Interest Income           
Loans$12,497  $11,442  $1,055 9.2% $7,772  $4,725 60.8%
Investment securities 544   601   (57)-9.5%  698   (154)-22.1%
Deposits in other financial institutions 181   126   55 43.7%  174   7 4.0%
Total interest income 13,222   12,169   1,053 8.7%  8,644   4,578 53.0%
            
Interest Expense           
Deposits 1,605   1,340   265 19.8%  592   1,013 171.1%
Borrowings 648   736   (88)-12.0%  582   66 11.3%
Total interest expense 2,253   2,076   177 8.5%  1,174   1,079 91.9%
            
Net interest income 10,969   10,093   876 8.7%  7,470   3,499 46.8%
Provision for credit losses 9,737   996   8,741 877.6%  496   9,241 1863.1%
Net interest income after provision for credit losses 1,232   9,097   (7,865)-86.5%  6,974   (5,742)-82.3%
            
Noninterest income:           
Service charges on deposit accounts 137   117   20 17.1%  90   47 52.2%
Net gain on sale of loans 163   307   (144)-46.9%  749   (586)-78.2%
Gain on sale of investment securities 125   4   121 3025.0%  (6)  131 -2183.3%
Other noninterest income 159   178   (19)-10.7%  83   76 91.6%
Total noninterest income 584   606   (22)-3.6%  916   (332)-36.2%
            
Noninterest expense:           
Salary and employee benefits 6,341   5,892   449 7.6%  4,269   2,072 48.5%
Occupancy and equipment 793   641   152 23.7%  610   183 30.0%
Data processing 588   490   98 20.0%  487   101 20.7%
Professional services 639   364   275 75.5%  288   351 121.9%
Other expenses 570   854   (284)-33.3%  703   (133)-18.9%
Total noninterest expense 8,931   8,241   690 8.4%  6,357   2,574 40.5%
            
Income (loss) before provision for income taxes (7,115)  1,462   (8,577)-586.7%  1,533   (8,648)-564.1%
Provision for income taxes (2,081)  411   (2,492)-606.3%  435   (2,516)-578.4%
Net income (loss)$ (5,034) $ 1,051  $ (6,085)-579.0% $ 1,098  $ (6,132)-558.5%
Net income available to common shareholders$ (4,950) $ 1,031  $ (5,981)-580.1% $ 1,081  $ (6,031)-557.9%
            
Earnings per share           
Basic earnings (loss) per share$(0.91) $0.21  $(1.11)-541.7% $0.22  $(1.12)-516.2%
Diluted earnings (loss) per share$(0.89) $0.20  $(1.09)-543.0% $0.21  $(1.10)-518.7%
            
Average shares outstanding 5,465,278   5,027,437   437,841 8.7%  4,967,905   497,373 10.0%
Diluted average shares outstanding 5,563,931   5,133,305   430,626 8.4%  5,087,829   476,102 9.4%


CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
       
 For the nine months ended
 September 30, 2019 September 30, 2018 Dollar changePercentage change
Interest Income      
Loans$34,449  $20,760  $13,689 65.9%
Investment securities 1,818   1,952   (134)-6.9%
Deposits in other financial institutions 440   577   (137)-23.7%
Total interest income 36,707   23,289   13,418 57.6%
       
Interest Expense      
Deposits 4,152   1,545   2,607 168.7%
Borrowings 1,863   1,257   606 48.2%
Total interest expense 6,015   2,802   3,213 114.7%
       
Net interest income 30,692   20,487   10,205 49.8%
Provision for credit losses 11,122   868   10,254 1181.3%
Net interest income after provision for credit losses 19,570   19,619   (49)-0.2%
       
Noninterest income:      
Service charges on deposit accounts 347   276   71 25.7%
Net gain on sale of loans 817   1,261   (444)-35.2%
Gain on sale of investment securities 150   -   150 NM 
Other noninterest income 428   217   211 97.2%
Total noninterest income 1,742   1,754   (12)-0.7%
       
Noninterest expense:      
Salary and employee benefits 17,462   11,202   6,260 55.9%
Occupancy and equipment 2,109   1,690   419 24.8%
Data processing 1,602   1,361   241 17.7%
Professional services 1,395   898   497 55.3%
Other expenses 2,153   1,894   259 13.7%
Total noninterest expense 24,721   17,045   7,676 45.0%
       
Income (loss) before provision for income taxes (3,409)  4,328   (7,737)-178.8%
Provision for income tax (1,014)  1,238   (2,252)-181.9%
Net income (loss)$ (2,395) $ 3,090  $ (5,485)-177.5%
Net income available to common shareholders$ (2,351) $ 3,042  $ (5,393)-177.3%
       
Earnings per share      
Basic earnings (loss) per share$(0.46) $0.61  $(1.07)-174.6%
Diluted earnings (loss) per share$(0.45) $0.60  $(1.05)-174.5%
       
Average shares outstanding 5,163,512   4,955,683   207,829 4.2%
Diluted average shares outstanding 5,262,165   5,033,425   228,740 4.5%


 Consolidated average balance sheet, interest, yield and rates
 (Unaudited)
 (Dollars in thousands)
                  
 For the three months ended
 September 30, 2019 June 30, 2019 September 30, 2018
 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate
Interest-Earnings Assets:                 
Deposits in other financial institutions$35,658 $181 2.01% $23,651 $126 2.14% $36,585 $174 1.89%
Investment securities 79,842  544 2.73%  89,102  601 2.70%  103,618  698 2.67%
Loans 816,281  12,497 6.07%  748,846  11,442 6.13%  541,049  7,772 5.70%
Total interest-earning assets 931,781  13,222 5.63%  861,599  12,169 5.67%  681,252  8,644 5.03%
Noninterest-earning assets 39,083      35,521      24,817    
Total Assets$970,864     $897,120     $706,069    
                  
Interest-Bearing Liabilities                 
Interest-bearing transaction accounts$37,644 $69 0.73% $33,191 $66 0.80% $15,649 $8 0.20%
Money market 372,008  959 1.02%  320,310  720 0.90%  277,216  394 0.56%
Savings deposits 7,099  5 0.28%  6,779  5 0.30%  5,580  4 0.28%
Certificates of deposit 100,705  572 2.25%  98,004  549 2.25%  56,743  186 1.30%
Total Interest-Bearing Deposits 517,456  1,605 1.23%  458,284  1,340 1.17%  355,188  592 0.66%
                  
FHLB advances 63,301  376 2.36%  65,797  423 2.58%  83,978  478 2.26%
Other borrowings 17,929  272 6.07%  14,711  313 8.29%  7,904  104 5.22%
Total Interest-Bearing Liabilities 81,230  648 3.16%  80,508  736 3.67%  91,882  582 2.51%
                  
Noninterest-bearing deposits 261,365      260,295      173,335    
Total Funding Sources 860,051  2,253 1.04%  799,087  2,076 1.04%  620,405  1,174 0.75%
                  
Noninterest-bearing liabilities 12,422      11,069      4,300    
                  
Shareholders' equity 98,391      86,964      81,364    
                  
Total Liabilities and Shareholders' Equity$970,864     $897,120     $706,069    
                  
Net interest spread    4.59%     4.62%     4.28%
                  
Net interest income  $10,969     $10,093     $7,470  
Net interest margin    4.67%     4.70%     4.35%


 Condensed Balance Sheets
 (Dollars in thousands, except per share amounts)
 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Assets         
Cash and due from banks$90,108  $45,337  $37,998  $45,855  $60,083 
Investment securities 73,209   84,752   85,852   98,170   99,217 
Loans 820,989   795,345   713,408   694,531   582,292 
Allowance for loan losses (7,893)  (7,637)  (6,641)  (6,252)  (5,389)
Net loans 813,096   787,708   706,767   688,279   576,903 
Right of use asset 6,877   7,271   6,951   -   - 
Premises and equipment, net 2,947   2,669   2,416   2,223   2,067 
Other assets and interest receivable 13,748 - 12,810 - 12,554 - 12,637 - 11,692 
Total assets$ 999,985  $ 940,547  $ 852,538  $ 847,164  $ 749,962 
          
Liabilities and Shareholders' Equity         
          
Liabilities         
Noninterest Bearing$266,205  $247,153  $263,255  $226,119  $180,657 
Interest Bearing 557,800   485,011   443,572   470,344   368,462 
Total Deposits 824,005   732,164   706,827   696,463   549,119 
Borrowings 72,930   99,929   47,832   62,909   114,906 
Accrued interest payable and other liabilities 9,779   10,599   11,777   4,241   4,046 
Total liabilities 906,714   842,692   766,436   763,613   668,071 
          
Shareholders' equity         
Common stock 68,804   68,740   58,576   58,373   58,242 
Additional paid-in capital 2,997   2,823   3,062   3,083   2,791 
Retained earnings 20,917   25,997   24,952   23,364   22,318 
Accumulated other comprehensive income 553   295   (488)  (1,269)  (1,460)
Total shareholders' equity 93,271   97,855   86,102   83,551   81,891 
Total liabilities and shareholders' equity$ 999,985  $ 940,547  $ 852,538  $ 847,164  $ 749,962 
          
Book value per common share$16.84  $17.60  $16.90  $16.41  $16.23 
Tangible book value per common share$16.66  $17.44  $16.72  $16.23  $16.07 
          
          
 Regulatory Capital Ratios (PBAM) 1
 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Tier 1 leverage ratio 9.54%  10.69%  9.97%  10.39%  11.51%
Tier 1 risk-based capital ratio 10.24%  11.10%  11.10%  11.36%  13.01%
Common equity Tier 1 ratio 10.24%  11.10%  11.10%  11.36%  13.01%
Total risk-based capital ratio 13.09%  14.10%  12.01%  12.25%  13.90%
Tangible equity / tangible assets 9.24%  10.32%  10.00%  9.74%  10.83%
          
1 Preliminary ratios for September 30, 2019
        


 Condensed Statements of Income
 (Dollars in thousands, except per share amounts)
 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Interest income$13,222  $12,169  $11,317  $10,333  $8,644 
Interest expense 2,253   2,076   1,686   1,570   1,174 
Net interest income 10,969   10,093   9,631   8,763   7,470 
Provision for credit losses 9,737   996   389   863   496 
Net interest income after provision for credit losses 1,232   9,097   9,242   7,900   6,974 
          
Noninterest income 584   606   552   561   916 
          
Salary and employee benefits 6,341   5,892   5,229   4,741   4,269 
Occupancy and equipment 793   641   674   620   610 
Data processing 588   490   524   541   487 
Professional services 639   364   392   350   288 
Other expenses 570   854   730   688   703 
Total noninterest expense 8,931   8,241   7,549   6,940   6,357 
          
Income before provision for income taxes (7,115)  1,462   2,245   1,521   1,533 
Income taxes (2,081)  411   656   474   435 
Net income$(5,034) $1,051  $1,589  $1,047  $1,098 
Net income available to common shareholders$(4,950) $1,031  $1,559  $1,025  $1,081 
          
Earnings per share         
Basic earnings per share$(0.91) $0.21  $0.31  $0.21  $0.22 
Diluted earnings per share$(0.89) $0.20  $0.30  $0.20  $0.21 
          
Average shares outstanding 5,465,278   5,027,437   4,996,811   5,042,921   4,967,905 
Diluted average shares outstanding 5,563,931   5,133,305   5,114,096   5,160,206   5,087,829 
          
          
 Performance Ratios
 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
ROAA -2.06%  0.47%  0.76%  0.52%  0.62%
ROAE -20.30%  4.85%  7.60%  5.03%  5.35%
ROTE -20.50%  4.90%  7.72%  5.09%  5.38%
Net interest margin 4.67%  4.70%  4.77%  4.52%  4.35%
Net interest spread 4.59%  4.62%  4.71%  4.45%  4.28%
Efficiency ratio 77.30%  77.03%  74.13%  74.43%  75.80%
Noninterest expense / average assets 3.65%  3.68%  3.61%  3.47%  3.57%


 Average Balances
 (Dollars in thousands)
 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Total assets$970,864  $897,120  $847,900  $793,271  $706,069 
Earning assets$931,781  $861,599  $818,630  $768,519  $681,252 
Total loans$816,281  $748,846  $701,715  $640,963  $541,049 
Total deposits$778,821  $718,579  $690,384  $600,640  $528,523 
Total equity$98,391  $86,964  $84,827  $82,606  $81,364 
          
          
 Loan Balances by Type
 (Dollars in thousands)
 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Real estate - investor owned$247,953  $245,068  $235,185  $234,540  $213,139 
Real estate - owner occupied 192,739   175,112   136,484   122,258   86,216 
Real estate - multifamily 68,536   67,839   69,083   62,388   62,811 
Real estate - single family 59,782   56,783   58,334   59,685   63,906 
Commercial business 204,166   201,892   173,027   180,602   124,770 
Land and construction 37,918   37,966   32,987   24,679   22,640 
Consumer 5,585   7,035   5,107   5,255   5,967 
Total loans held for investment 816,679   791,695   710,207   689,407   579,449 
Loans held for sale 4,310   3,650   3,201   5,124   2,843 
Total loans, including loans held for sale 820,989   795,345   713,408   694,531   582,292 
Allowance for loan losses (7,893)  (7,637)  (6,641)  (6,252)  (5,389)
Net loans$813,096  $787,708  $706,767  $688,279  $576,903 
          
          
 Deposits by Type
 (Dollars in thousands)
 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Non interest bearing DDA$266,205  $247,153  $263,255  $226,119  $180,657 
Interest bearing DDA 47,805   29,583   23,195   21,079   16,481 
Savings & MMA 394,128   363,803   325,880   344,776   294,600 
Retail CD 7,132   7,025   4,135   7,651   6,461 
Jumbo CD 108,735   84,600   90,362   96,838   50,920 
Total deposits$824,005  $732,164  $706,827  $696,463  $549,119 
          
          
 Asset Quality
 (Dollars in thousands)
 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Total Loans$820,989  $795,345  $713,408  $694,531  $582,292 
30-89 day past due loans$-  $155  $-  $-  $- 
90+ day past due loans$-  $-  $-  $-  $- 
Nonaccrual loans$-  $-  $-  $-  $- 
          
NPAs / Assets 0.00%  0.00%  0.00%  0.00%  0.00%
NPLs / loans & OREO 0.00%  0.00%  0.00%  0.00%  0.00%
Net chargeoffs$9,481  $-  $-  $-  $- 
Net charge-offs/avg loans (annualized) 4.65%  0.00%  0.00%  0.00%  0.00%
Allowance for loan losses to loans 0.96%  0.96%  0.93%  0.90%  0.93%
Allowance for loan losses to nonaccrual loans NM   NM   NM   NM   NM