RIVERSIDE, Calif.--(BUSINESS WIRE)--Premier Service Bank, Riverside, California (OTCBB:PSBK) today announced its unaudited financial results for the quarter and year ended December 31, 2010.
For the year ended December 31, 2010, the Bank reported a net loss of $3.26 million, or ($2.66) per diluted share, compared to a net loss of $972 thousand, or ($0.80) per diluted share for the year ended December 31, 2009. The net loss for the fourth quarter of 2010 was $707 thousand, or ($0.57) per diluted share, compared to a net loss of $821 thousand, or ($0.66) per diluted share for the fourth quarter of 2009. The variance in earnings between the respective periods is primarily attributed to the provisions to the Bank’s allowance for loan losses, which, for the year ended December 31, 2010, totaled $4.01 million, compared to $1.87 million for the year ended December 31, 2009. The provision to the allowance for loan losses for the fourth quarter of 2010 totaled $960 thousand, compared to $1.02 million for the same period in 2009.
At December 31, 2010, the Bank had $8.21 million of non-performing loans, representing 6.98% of the Bank’s total loans, compared to $7.48 million of non-performing loans, or 5.82% of total loans, at December 31, 2009. Impairment analyses are performed on the Bank’s non-performing loans and impairment adjustments, if any, are written off as a part of this process. The Bank had foreclosed real estate of $1.87 million at December 31, 2010, compared to foreclosed real estate of $823 thousand at December 31, 2009. All non-performing loans were on non-accrual at December 31, 2010 and 2009. The allowance for loan losses totaled $2.55 million at December 31, 2010, or 2.17% of total loans as of that date, compared to $1.9 million at December 31, 2009, or 1.48% of total loans as of that date.
At December 31, 2010, the Bank had total assets of $156 million, representing a decrease of $7.8 million or 4.77% compared to total assets of $164 million at December 31, 2009. Total deposits at December 31, 2010 were $123.4 million, representing a 2.68% reduction compared to total deposits of $126.8 million at December 31, 2009. Non-interest bearing demand deposits totaled $37.6 million at December 31, 2010, representing 30.5% of total deposits at that date, compared to $39 million of non-interest bearing demand deposits at December 31, 2009, which represented 30.8% of total deposits at that date.
The Bank’s gross loan portfolio totaled $117.6 million at December 31, 2010, representing an 8.4% decrease over gross loans of $128.5 million at December 31, 2009. Unfunded credit commitments stood at $13.3 million at December 31, 2010, representing a 38% decrease when compared to unfunded commitments of $21.5 million at December 31, 2009.
The Bank’s net interest margin for the year ended December 31, 2010 was 4.96%, an increase of 0.25% compared to the net interest margin of 4.71% for the year ended December 31, 2009. The Bank’s net interest margin for the quarter ended December 31, 2010 was 4.73%, an increase of 0.14% compared to the net interest margin of 4.59% for the fourth quarter of 2009.
At December 31, 2010, the Bank was adequately capitalized under applicable regulatory guidelines. Total shareholders’ equity at December 31, 2010 was $12.9 million, representing a decrease of $3.4 million, or 20.9%, compared to total shareholders’ equity of $16.3 million at December 31, 2009. On December 1, 2010, the Bank entered into a Consent Order with the Federal Deposit Insurance Corporation and the California Department of Financial Institutions. Among the provisions of the Consent Order is the requirement that within 90 days from the effective date of the Order (by February 28, 2011), the Bank shall increase and thereafter maintain its Tier I capital in such an amount to ensure that the Bank’s leverage ratio equals or exceeds 9.50 percent and its total risk-base capital ratio equals or exceeds 12 percent. As of December 31, 2010, these capital ratios were 8.05% and 11.64%, respectively. As a result, the Bank was not in compliance, as of December 31, 2010, with the capital ratios required by the Consent Order. The Bank intends to effect compliance with a rights and public offering of up to $5 million of its common stock, which, subject to regulatory approvals, will commence in February 2011.
The Bank’s President and Chief Executive Officer, Kerry L. Pendergast, stated, “2010 found the region continuing to struggle with the effects of high unemployment, which was originally rooted in the collapse of the residential and commercial construction market. Unlike other regions in the United States, the Inland Region has continued to struggle to find its economic footing; this lack of traction has continued to exacerbate the business plans for many of the region’s small businesses, many of which are clients of the Bank.”
Pendergast went on to say, “Throughout 2010 Premier Service Bank focused its efforts on managing the credit portfolio; this included hiring a Special Assets Manager to assist the Bank in liquidating foreclosed property and in working with borrowers who are experiencing difficulties in repaying their loans in a timely manner. The continuing weakness in the national, state and regional economy resulted in an increase in the level of classified credits within the institution; it also prompted significant contributions to the Bank’s Allowance for Loan Losses throughout the 2010 calendar year. For the 12-month period ended December 31, 2010 the Bank contributed $4.01 million to its allowance for loan losses, compared to $1.87 million for the same period in 2009.”
Pendergast said in closing, “With a Special Assets Manager in place, we are aggressively focusing our efforts on the orderly disposal of bank owned real estate. We are also working closely with our borrowers in an attempt to arrive at collaborative solutions to the varied problems many of our business clients are experiencing. Notwithstanding the challenges that are presented in an economic environment that continues to be fueled with uncertainty, the Bank will continue to focus on positioning itself to participate in the incremental improvement that most assuredly will take place in the region.”
Premier Service Bank is a California state-chartered bank with two offices, its headquarters office in Riverside and a full-service banking office in Corona. The Bank provides commercial banking services, including a wide variety of checking accounts, investment services with competitive deposit rates, on-line banking products, and real estate, construction, commercial and consumer loans, to small and medium-sized businesses, professionals and individuals. Additional information about Premier Service Bank is available at its website at www.premierservicebank.com.
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 Premier Service 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 in the following: Premier Service Bank’s ability to increase its assets, deposits and total loans, control expenses, retain critical personnel, manage interest rate risk, manage technological changes, address regulatory requirements, and other risks discussed from time to time in Premier Service Bank’s filings and reports with the Federal Deposit Insurance Corporation. 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 Premier Service Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
For a more complete discussion of risks and uncertainties, investors and security holders are urged to read Premier Service Bank’s annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by Premier Service Bank with the FDIC.
See the unaudited Financial Data:
|Financial Data - Premier Service Bank|
|(In Thousands)||Dec. 31, 2010||Sept. 30, 2010||June 30, 2010||Mar. 31, 2010||Dec. 31, 2009|
|Interest income(not taxable equivalent)||$||2,063||$||2,057||$||2,192||$||2,194||$||2,167|
|Net interest income||1,734||1,706||1,801||1,769||1,645|
|Provision for loan losses||960||195||2,516||340||1,020|
|Net interest income after|
|provision for loan losses||774||1,511||(715||)||1,429||625|
|Income before income taxes||(707||)||145||(2,244||)||51||(836||)|
|(Benefit)/Provision for income taxes||-||502||(32||)||33||(15||)|
|(In Thousands)||Dec. 31, 2010||Sept. 30, 2010||June 30, 2010||Mar. 31, 2010||Dec. 31, 2009|
|Net income - basic||$||(0.57||)||$||(0.29||)||$||(1.81||)||$||0.01||$||(0.66||)|
|Weighted average shares used in basic||1,261||1,261||1,261||1,261||1,261|
|Net income - diluted||$||(0.57||)||$||(0.29||)||$||(1.81||)||$||0.01||$||(0.66||)|
|Weighted average shares used in diluted||1,261||1,261||1,261||1,261||1,261|
|Book value at period end||$||6.97||$||7.60||$||7.91||$||9.71||$||9.70|
|Balance Sheet - At Period-End|
|Cash and due from banks||$||24,060||$||22,041||$||16,372||$||12,486||$||17,707|
|Investments and Fed fund sold||8,476||8,491||9,709||11,050||11,495|
|Allowance for loan losses||(2,549||)||(2,952||)||(3,060||)||(2,188||)||(1,900||)|
|Total Liabilities and Shareholders' equity||$||155,992||$||157,488||$||155,956||$||158,022||$||163,809|
|Asset Quality & Capital - At Period-End|
|Loans past due 90 days or more||-||757||-|
|Other real estate owned||1,865||1,162||1,242||1,436||823|
|Other bank owned assets||-||-||-||-||-|
|Total non-performing assets||$||10,074||$||10,797||$||7,832||$||9,819||$||8,303|
|Allowance for losses to loans, gross||2.17||%||2.42||%||2.46||%||1.71||%||1.48||%|
|Non-accrual loans to total loans, gross||6.98||%||7.89||%||5.30||%||5.95||%||5.82||%|
|Non-performing loans to total loans, gross||6.98||%||7.89||%||5.30||%||6.54||%||5.82||%|
|Non-performing asset to total assets||6.46||%||6.86||%||5.02||%||6.21||%||5.07||%|
|Allowance for losses to non-performing loans||31.05||%||30.64||%||46.43||%||26.10||%||25.40||%|
|Total capital to risk-adjusted assets||11.64||%||11.90||%||11.86||%||13.17||%||12.88||%|
|Tier one capital to risk-adjusted assets||10.38||%||10.63||%||10.60||%||11.91||%||11.63||%|
|Equity to average assets (leverage ratio)||8.05||%||8.57||%||8.61||%||10.05||%||9.69||%|