ProAmerica Bank Reports 2012 Third Quarter Earnings

LOS ANGELES, CA--(Marketwire - Oct 31, 2012) - ProAmérica Bank (OTCQB: PMRA) today reported Net Income of $285,000 for the third quarter of 2012, or 10 cents per share, equal to the third quarter of 2011. For the first nine months of 2012, the Bank reported Net Income of $722,000, or 26 cents per share, compared to Net Income of $455,000, or 17 cents per share, for the first nine months of 2011. "Once again, we are pleased that our core earnings continue on a strong growth pattern as reflected in our nine-month year over year 59% increase in Net Income," stated L. Bruce Mills, Jr., President and CEO.

"ProAmérica Bank has had an impact in the communities it serves and on the national landscape exemplifying the entrepreneurial fortitude of the small business and Latino communities. The Board is pleased that the commitment to its mission shared by investors, clients and the community has parlayed into solid financial performance," said Executive Chairwoman Maria Contreras-Sweet. She added, "ProAmérica achieved continued growth with a new high of $146 million in Total Assets, attesting to the strength of the ProAmérica value proposition and the quality of our team. We have expanded Total Loans and Deposits by 6% and 15%, respectively. Our team's shared commitment to our mission has helped propel our continued growth and build a value-driven Latino-owned banking franchise."

2012 Third Quarter Highlights

• Three-month Net Income of $285,000 -- level with the quarter ended September 30, 2011.
  
  
• Total Assets at September 30, 2012 increased to $146.0 million, an increase of $16.0 million or 12% from September 30, 2011.
  
  
• Total Loans at September 30, 2012 increased to $105.7 million, an increase of $5.6 million or 6% from September 30, 2011.
  
  
• Total Deposits at September 30, 2012 increased to $122.6 million, an increase of $16.0 million or 15% from September 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 15.4% and a Total Risk-Based Capital Ratio of 20.1% at September 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 third quarter, Net Interest Income before the Provision for Loan Losses declined $49,000 compared to the 2011 third quarter. The Net Interest Margin declined to 4.2% for the quarter ended September 30, 2012, down from 4.9% for the 2011 third quarter. The decline is the result of the higher level of Nonperforming Assets discussed below. Without the impact of the Nonperforming Assets, the Net Interest Margin would have increased for the quarter.

There was no Provision for Loan Losses required in the third quarters of 2012 or 2011.

Non-interest Income increased $68,000, or 117% in 2012 versus 2011 as a result of a higher volume of SBA loans sold. Third quarter 2012 Non-interest Income included a $67,000 gain on the sale of SBA loans as compared to none in the same period of 2011.

Non-interest Expense for the 2012 third quarter was $1,300,000, compared with $1,281,000 for the 2011 third quarter, an increase of 1%. The increase resulted from higher Salaries and Employee Benefits expense and other Operating Expense partially offset by lower Occupancy Expense. The efficiency ratio was 82.1% for the 2012 third quarter, compared with 81.8% for the same period last year.

Loans, before the allowance for loan losses, grew 6% to $105.7 million at September 30, 2012 compared to $97.9 million at September 30, 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 is expected to close escrow in the fourth quarter 2012. There was no Other Real Estate Owned in 2011.

Total Deposits increased 15% to $122.6 million at September 30 2012, from $106.7 million at September 30, 2011.

Asset Quality
Nonperforming Assets (the sum of loans past due 90 days and accruing, nonaccrual loans and other real estate owned) increased to 7.1% of total assets at September 30, 2012, compared with 1.0% at September 30, 2011. All of the nonaccrual loans are current in their payments 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 September 30, 2012, compared with $2.1 million, or 2.1% of loans, at September 30, 2011. There were no net loan charge-offs for the 2012 third quarter as compared to 0.4% of loans for the 2011 third quarter.

Capital Resources
Total Shareholders' Equity declined to $22.3 million at September 30, 2012 from $22.9 million at September 30, 2011. The Bank's book value available to common shareholders per common share decreased to $6.75 at September 30, 2012 from $6.96 at September 30, 2011.

At September 30, 2012, the Bank's Tier 1 Leverage Capital Ratio was 15.4% versus 18.4% at September 30, 2011. The Total Risk-based Capital Ratio was 20.1% as of September 30, 2012 as compared to 22.6% at September 30, 2011.

Mills concluded, "Now immersed in the culture and energetic environment at ProAmérica Bank, I am proud to be a part of this talented group of seasoned bankers who work extremely hard to deliver the everyday successes that enable our strong organic growth. We have expanded our team, further invigorating the organization and strengthening our unwavering pursuit to build a strong franchise that serves its customers with excellence."

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)
				September 30,				September 30,				%
				2012				2011				Change
				Unaudited				Unaudited
Assets:
	Cash and Due From Banks			$	2,198			$	1,761			24.8	%
	Federal Funds Sold				26,165				20,205			29.5	%
	Interest-bearing Balances at Other Financial Institutions				7,693				8,182			-6.0	%
		Total Cash and Cash Equivalents			36,056				30,148			19.6	%
	Loans Net of Deferred Loan Fees/Costs				105,664				100,018			5.6	%
	Allowance for Loan Losses				2,866				2,127			34.7	%
		Loans Net of Allowance for Loan Losses			102,798				97,891			5.0	%
	Premises and Equipment, net				1,053				119			784.9	%
	Federal Home Loan Bank Stock				515				418			23.2	%
	Other Real Estate Owned				3,911				0			NA
	Accrued Interest Receivable and Other Assets				1,713				1,502			14.0	%
		Total Assets		$	146,046			$	130,078			12.3	%
Liabilities:
	Non-Interest-Bearing Demand Deposits			$	49,336			$	38,511			28.1	%
	Interest-Bearing Demand Deposits (NOW Deposits)				2,425				4,077			-40.5	%
	Savings and Money Market				23,301				21,820			6.8	%
	Certificates of Deposit				47,544				42,227			12.6	%
		Total Interest-Bearing Deposits			73,270				68,124			7.6	%
		Total Deposits			122,606				106,635			15.0	%
	Other Borrowings				0				0			0.0	%
	Accrued Interest Payable and Other Liabilities				1,127				544			107.2	%
Total Liabilities					123,733				107,179			15.4	%
Shareholders' Equity:
	Common Stock				27,248				27,245			0.0	%
	Additional Paid in Capital				1,752				1,656			5.8	%
	Accumulated Deficit				(10,437	)			(9,752	)		7.0	%
	SBLF Preferred Stock				3,750				3,750			NA
		Total Shareholders' Equity			22,313				22,899			-2.6	%
		Total Liabilities and Shareholders' Equity		$	146,046			$	130,078			12.3	%
		Tier 1 leverage			15.4	%			18.4	%
		Tier 1 risk-based capital			18.8	%			21.4	%
		Total risk-based capital			20.1	%			22.6	%

PROAMÉRICA BANK STATEMENT OF OPERATIONS
For the Periods Indicated
(Dollars in thousands except per share data)
				Three Months									Nine Months
For The Period Ended September 30,				2012			2011			% Change			2012			2011			% Change
				Unaudited			Unaudited						Unaudited			Unaudited
Interest Income:
	Interest and Fees on Loans			$	1,542		$	1,590		-3.0	%		$	4,580		$	4,421		3.6	%
	Interest on Federal Funds Sold				17			10		70.0	%			34			33		3.0	%
	Interest on Balances at Other Financial Institutions				9			16		-43.8	%			34			60		-43.3	%
	Dividends on FHLB and PCBB Stock				1			0		NA				5			1		400.0	%
		Total Interest Income			1,569			1,616		-2.9	%			4,653			4,515		3.1	%
Interest Expense:
	Interest on Deposit Accounts				110			108		1.9	%			309			296		4.4	%
	Net Interest Income				1,459			1,508		-3.2	%			4,344			4,219		3.0	%
Provision for Loan Losses					0			0		NA				0			266		-100.0	%
	Net Interest Income After Provision for Loan Losses				1,459			1,508		-3.2	%			4,344			3,953		9.9	%
Non-Interest Income:
	Non-Interest Income				126			58		117.2	%			456			563		-19.0	%
Non-Interest Expense:
	Salaries and Employee Benefits				815			727		12.1	%			2,509			2,316		8.3	%
	Stock Based Compensation Expense				11			62		-82.3	%			29			209		-86.1	%
	Occupancy Expense				145			222		-34.7	%			416			668		-37.7	%
	Operating Expense				329			270		21.9	%			1,124			867		29.6	%
		Total Non-Interest Expense			1,300			1,281		1.5	%			4,078			4,060		0.4	%
	Pre-tax Income				285			285		0.0	%			722			456		58.3	%
Provision for Income Taxes					0			0		NA				0			1		-100.0	%
	Net Income			$	285		$	285		0.0	%		$	722		$	455		58.7	%
	Earnings per share - basic and diluted earnings per share			$	0.10		$	0.10		0.0	%		$	0.26		$	0.17		58.7	%

PROAMÉRICA BANK FINANCIAL HIGHLIGHTS
For the Periods Indicated
(Dollars in thousands except per share data)
				Three Months									Nine Months
For The Period Ended September 30,				2012			2011			% Change			2012			2011			% Change
				Unaudited			Unaudited						Unaudited			Unaudited
Per Share:
	Net income, basic and diluted			$	0.10		$	0.10		0.0	%		$	0.26		$	0.17		58.7	%
	Book value - Common			$	6.75		$	6.96		-3.0	%
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				2,751,000			2,750,000		0.0	%			2,750,473			2,750,000		0.0	%
Financial Ratios:
	Performance Ratios:
		Return on average assets			0.8	%		0.9	%	-11.1	%			0.7	%		0.5	%	40.0	%
		Return on average common equity			6.1	%		6.0	%	1.7	%			5.3	%		3.2	%	65.6	%
		Net interest margin			4.2	%		4.9	%	-14.3	%			4.4	%		4.8	%	-8.3	%
		Efficiency ratio			82.1	%		81.8	%	0.4	%			84.9	%		84.9	%	0.0	%
	Capital Adequacy Ratios (Period-end):
		Tier 1 leverage			15.4	%		18.4	%	-16.1	%
		Tier 1 risk-based capital			18.8	%		21.4	%	-12.0	%
		Total risk-based capital			20.1	%		22.6	%	-11.1	%
Asset Quality Ratios:
	Allowance for loan and lease losses to:
		Total loans			2.7	%		2.1	%	28.6	%
		Nonaccrual loans			44.4	%		426.3	%	-89.6	%
	Nonperforming assets to:
		Total loans and other real estate owned			9.5	%		1.3	%	630.8	%
		Total assets			7.1	%		1.0	%	610.0	%
	Net charge-offs (recoveries) to average loans (annualized)				0.0	%		0.4	%	NA				0.3	%		0.3	%	0.0	%
Asset Quality Measures:
	Nonaccrual loans (1)				6,460			499		1194.6	%
	Other real estate owned				3,911			0		NA
		Total nonperforming assets			10,371			499		1978.4	%
(1) Nonaccrual loans less than 30 days past due					6,460			162		3887.7	%