RIVERSIDE, Calif.--(BUSINESS WIRE)--Premier Service Bank, Riverside, California (OTCBB:PSBK - News) today announced its financial results for the quarter and year ended December 31, 2009.

 

For the year ended December 31, 2009, the bank reported a net loss of $802 thousand, or ($0.67) per diluted share, compared to a net loss of $100 thousand, or ($0.08) per diluted share for the year ended December 31, 2008. The net loss for the fourth quarter of 2009 was $651 thousand, or ($0.52) per diluted share, compared to a net loss of $227 thousand, or ($0.18) per diluted share for the fourth quarter of 2008. The decline in earnings between the respective periods is primarily attributed to the increased provisions to the bank’s allowance for loan losses, which for the year ended December 31, 2009 totaled $1.87 million, compared to $1.47 million for the year ended December 31, 2008. The provision to the allowance for loan losses for the fourth quarter of 2009 totaled $1.02 million, compared to $595 thousand for the same period in 2008. Additionally, the bank experienced an increase in the FDIC assessment for insurance of its deposits, which for the year ended December 31, 2009 totaled $272 thousand, compared to $91 thousand for the year ended December 31, 2008.

 

At December 31, 2009, the Bank had $5.05 million of nonperforming loans, representing 3.93% of the Bank’s total loans, compared to $2.83 million of nonperforming loans, or 2.25% of total loans, at December 31, 2008. The Bank had foreclosed real estate of $823 thousand at December 31, 2009, compared to foreclosed real estate of $572 thousand and other foreclosed assets of $166 thousand at December 31, 2008. At December 31, 2009, non-accrual loans totaled $5.05 million, representing 3.93% of total loans at that date, compared to non-accrual loans of $2.83 million at December 31, 2008, representing 2.25% of total loans at that date. All loans delinquent 90 days or more were on non-accrual at December 31, 2009 and 2008. The allowance for loan losses totaled $1.9 million at December 31, 2009, or 1.48% of total loans as of that date, compared to $1.6 million at December 31, 2008, or 1.27% of total loans as of that date.

 

At December 31, 2009, the Bank had total assets of $164 million, representing an increase of $12.5 million or 8.2% growth over total assets of $151.5 million at December 31, 2008. Total deposits at December 31, 2009 were $126.8 million, representing 14.68% growth over total deposits of $110.5 million at December 31, 2008. Non-interest bearing demand deposits totaled $39 million at December 31, 2009, representing 30.8% of total deposits at that date, compared to $38 million of non-interest bearing demand deposits at December 31, 2008, which represented 34.4% of total deposits at that date.

 

The Bank’s gross loan portfolio grew to $128.6 million at December 31, 2009, representing a 2.3% increase over gross loans of $125.7 million at December 31, 2008. Unfunded credit commitments stood at $21.5 million at December 31, 2009, representing a 20% increase compared to unfunded commitments of $17.9 million at December 31, 2008.

The Bank’s net interest margin for the year ended December 31, 2009 was 4.83%, a decrease of 0.29% compared to 2008. The Bank’s net interest margin for the quarter ended December 31, 2009 was 5.07%, an increase of 0.11% compared to the fourth quarter of 2008.

 

At December 31, 2009, the Bank remained well capitalized under applicable regulatory guidelines. Total shareholders’ equity at December 31, 2009 was $16.4 million, representing an increase of $3.2 million, or 24.3% over total shareholders’ equity of $13.2 million at December 31, 2008. The increase is the result of the sale on February 20, 2009 of $4 million of Preferred Stock to the United States Department of the Treasury under its Capital Purchase Program.

The Bank’s President and Chief Executive Officer, Kerry Pendergast, stated, “2009 continued to be a year of challenges for the banking industry on numerous fronts, with deteriorating asset quality being at the forefront of those challenges. Nowhere have those challenges been more telling than in the Inland Region, where construction related activity had been the number one economic driver, with residential and commercial construction and development, along with new home sales, grinding to a halt, and unemployment eclipsing 14%. This severe decline has had a spill-over effect into other industries and businesses and has created unique challenges for banks of all size, chiefly in the area of credit / asset quality.”

Pendergast went on to say, “Effectively identifying and managing risk during this period of unprecedented economic turmoil continues to be the primary focus of this institution. For the 12-month period ended December 31, 2009 the Bank contributed $1.87 million to its allowance for loan losses, compared to $1.47 million for the same period in 2008. As I first reported at the conclusion of the second quarter of 2009, a significant portion of the contribution to the Bank’s allowance for loan losses throughout 2009 has been driven by impairment charges the Bank has taken on two loan participations the bank purchased in the 2006 and 2007 calendar years. Working with our partners in these two transactions, we are focused in arriving at an orderly liquidation of the underlying collateral sometime within the 2010 calendar year.”

 

Pendergast said in closing, “While we were faced with many challenges throughout this past year, we also took advantage of the opportunities that were presented through the dramatic consolidation of banking institutions that took place in our region. With a focused marketing and business development effort, the Bank was able to increase its deposit base by 14.68%, while at the same time diligently working to improve the Bank’s core earnings structure. This improvement resulted from trimming expenses through contract review and renegotiation with key vendors, and the realignment of staff to improve the Bank’s overall operating efficiency. The adjustments made by the Bank in 2009 enabled the Bank to reduce its non-interest expense by 3.74% (net of FDIC special assessments). As we continue to operate in an economic environment that is filled with uncertainty and is struggling to regain traction, the Bank will remain focused on growing our base and improving our overall operating efficiency, while continuing to work closely with our clients, who are also working diligently to weather the economic storm.”

 

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.

 

Forward-looking Statements

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
(Unaudited)
		Quarter Ended
(In Thousands)		Dec. 31, 2009					Sept. 30, 2009					June 30, 2009					Mar. 31, 2009					Dec. 31, 2008
Interest income(not taxable equivalent)		$	2,337				$	2,305				$	2,303				$	2,269				$	2,447
Interest expense			522					596					605					626					650
Net interest income			1,815					1,709					1,698					1,643					1,797
Provision for loan losses			1,020					255					485					110					595
Net interest income after
provision for loan losses			795					1,454					1,213					1,533					1,202
Non-interest income			203					200					188					177					197
Non-interest expense			1,664					1,507					1,705					1,687					1,813
Income before income taxes			(666	)				147					(304	)				23					(414	)
(Benefit)/Provision for income taxes			(15	)				47					(22	)				(9	)				(187	)
Net income		$	(651	)			$	100				$	(282	)			$	32				$	(227	)
		Quarter Ended
(In Thousands)		Dec. 31, 2009					Sept. 30, 2009					June 30, 2009					Mar. 31, 2009					Dec. 31, 2008
Per share:
Net income - basic		$	(0.52	)			$	0.07				$	(0.23	)			$	0.02				$	(0.18	)
Weighted average shares used in basic			1,261					1,261					1,261					1,261					1,261
Net income - diluted		$	(0.52	)			$	0.07				$	(0.23	)			$	0.02				$	(0.18	)
Weighted average shares used in diluted			1,261					1,261					1,261					1,261					1,261
Book value at period end		$	9.84				$	10.36				$	10.26				$	10.51				$	10.48
Ending shares			1,261					1,261					1,261					1,261					1,261
Balance Sheet - At Period-End
Cash and due from banks		$	17,707				$	15,847				$	15,773				$	12,835				$	4,315
Investments and Fed fund sold			11,495					13,562					15,468					18,531					15,843
Gross Loans			128,591					125,888					128,039					123,609					125,684
Deferred fees			(348	)				(336	)				(345	)				(335	)				(334	)
Allowance for loan losses			(1,900	)				(1,221	)				(2,155	)				(1,670	)				(1,596	)
Net Loans			126,343					124,331					125,539					121,604					123,754
Other assets			8,434					8,034					7,565					7,534					7,590
Total Assets		$	163,979				$	161,774				$	164,345				$	160,504				$	151,502
Non-interest-bearing deposits		$	39,034				$	38,945				$	41,281				$	39,683				$	38,040
Interest-bearing deposits			87,760					84,802					82,225					76,789					72,522
Other liabilities			20,764					20,950					23,901					26,792					27,731
Shareholders' equity			16,421					17,077					16,938					17,240					13,209
Total Liabilities and Shareholders' equity		$	163,979				$	161,774				$	164,345				$	160,504				$	151,502
Asset Quality & Capital - At Period-End
Non-accrual loans		$	5,054				$	4,990				$	5,380				$	4,699				$	2,833
Loans past due 90 days or more			-					76					-					-					-
Other real estate owned			823					1,178					572					572					572
Other bank owned assets			-					-					149					166					166
Total non-performing assets		$	5,877				$	6,244				$	6,101				$	5,437				$	3,571
Allowance for losses to loans, gross			1.48	%				0.97	%				1.68	%				1.35	%				1.27	%
Non-accrual loans to total loans, gross			3.93	%				3.96	%				4.20	%				3.80	%				2.25	%
Non-performing loans to total loans, gross			3.93	%				4.02	%				4.20	%				3.80	%				2.25	%
Non-performing asset to total assets			3.58	%				3.86	%				3.71	%				3.39	%				2.36	%
Allowance for losses to non-performing loans			37.59	%				24.10	%				40.06	%				35.54	%				56.34	%
Total capital to risk-adjusted assets			13.09	%				13.39	%				13.48	%				14.13	%				10.94	%
Tier one capital to risk-adjusted assets			11.84	%				12.46	%				12.22	%				12.88	%				9.71	%
Equity to average assets (leverage ratio)			9.80	%				10.24	%				10.53	%				10.98	%				8.50	%