RIVERSIDE, Calif.--(BUSINESS WIRE)--
For the quarter ended March 31, 2012, the bank reported net loss of $190 thousand, or <$0.16> per diluted share, compared to net loss of $569 thousand, or <$0.48> per diluted share for the quarter ended March 31, 2011. The improvement in earnings between the respective periods is primarily attributed to the decrease in provision for loan losses. The provision to the allowance for loan losses for the first quarter of 2012 totaled $225 thousand, compared to $725 thousand for the same period in 2011.
At March 31, 2012, the Bank had $5.5 million of non-performing loans, representing 5.53% of the Bank’s total loans, compared to $8.0 million of non-performing loans, or 7.08% of total loans, at March 31, 2011. The Bank had foreclosed real estate of $3.0 million at March 31, 2012, compared to foreclosed real estate of $3.9 million at March 31, 2011. At March 31, 2012, non-accrual loans totaled $5.5 million, representing 5.53% of total loans at that date, compared to non-accrual loans of $8.0 million at March 31, 2011, representing 7.08% of total loans at that date. The allowance for loan losses totaled $2.75 million at March 31, 2012, or 2.77% of total loans as of that date, compared to $2.56 million at March 31, 2011, or 2.25% of total loans as of that date.
At March 31, 2012, the Bank had total assets of $139 million, representing a decrease of $15.3 million or 9.93% compared to total assets of $154 million at March 31, 2011. The Bank had $16 million in FHLB borrowings at March 31, 2012, representing a decrease of $3 million or 15.78% from the FHLB borrowings of $19 million at March 31, 2011. Total deposits at March 31, 2012 were $111.7 million, representing a decrease of 8.66% compared to total deposits of $122.3 million at March 31, 2011. Non-interest bearing demand deposits totaled $44.2 million at March 31, 2012, representing 39.57% of total deposits at that date, compared to $44.9 million of non-interest bearing demand deposits at March 31, 2011, which represented 36.71% of total deposits at that date.
The Bank’s gross loan portfolio decreased to $99 million at March 31, 2012, representing a 12.85% decrease compared to gross loans of $113.6 million at March 31, 2011. Unfunded credit commitments stood at $7.5 million at March 31, 2012, representing a 46.42% decrease compared to unfunded commitments of $14 million at March 31, 2011.
The Bank’s net interest margin for the quarter ended March 31, 2012 was 4.94%, an increase of 19 basis points as compared to the net interest margin of 4.75% for the first quarter of 2011.
Total shareholders’ equity at March 31, 2012 was $10.5 million, representing a decrease of $1.8 million, or 14.63% compared to total shareholders’ equity of $12.3 million at March 31, 2011. On December 1, 2010, the Bank entered into a Consent Order with the Federal Deposit Insurance Corporation and the California Department of Financial Institutions. The Consent Order requires the Bank, within 90 days from the effective date of the Order (by February 28, 2011), to 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% and its total risk-based capital ratio equals or exceeds 12%. As of March 31, 2012, these capital ratios were 7.42% and 11.09%, respectively. As a result, the Bank was not in compliance, as of March 31, 2012, with the capital ratios required by the Consent Order. Although the Bank was not in compliance with the capital requirements of the Consent Order as of March 31, 2012, the Bank was adequately capitalized as of that date under applicable regulatory guidelines.
On February 27, 2012, the Bank entered into an Agreement and Plan of Merger (the “Merger Agreement”) with First California Bank, a state chartered commercial bank (“FCB”), and its holding company, First California Financial Group, Inc. (“FCAL”)(Nasdaq: FCAL - News), pursuant to which the Bank will merge into FCB (the “Merger”). The transaction is subject to regulatory and shareholder approvals and customary closing conditions. If the Merger closes as anticipated, the Bank’s capital issues will be resolved. If the Merger does not proceed for any reason, in order to comply with the capital requirements of the Consent Order, the Bank will need to complete a new capital offering or find another solution which improves its capital ratios, such as finding a new merger partner, arranging for the possible sale of the Bank or a transfer of control of the Bank, or taking steps to decrease the asset size of the Bank until the ratios are in compliance with the Consent Order. The Bank believes that the Merger will close as anticipated and that there will be no need to implement any such contingency plans.
The Bank’s President and Chief Executive Officer, Kerry L. Pendergast, stated, “The positive trends exhibited and commented on in the fourth quarter of 2011 extended into the first quarter of 2012. For the quarter, the provision into the Bank’s allowance for loan losses totaled $225,000, as compared to a fourth quarter 2011 provision of $910,000; this resulted in a 75% reduction in the provision expenses on a quarter over quarter basis. Notwithstanding the significant reduction in the provision expense, the Bank’s allowance for loan losses totaled $2.75 million at March 31, 2012 or 2.77% of total loans as of that date; we hope this is an indication that the loan portfolio is beginning to stabilize and that the pace of “newly identified” problems loans is beginning to subside.”
Pendergast went on to say, “In addition to seeing some signs that may indicate stabilization within the loan portfolio, we have also been able to reduce the level of non-performing loans. On a quarter over quarter basis, problem loans have been reduced by $3.4 million or 28.71%; we are hopeful that this trend is an indication that real estate values and economic conditions in the Inland Empire are improving or at least stabilizing. It should also be noted that the Bank’s delinquency ratio for the quarter ended March 31, 2012 was 3.65%, compared to 6.44% at December 31, 2011, perhaps another indication of improving economic conditions for our borrowers.”
Pendergast said in closing, “Management has made a strong effort to reduce the level of non-performing loans within the institution and to dispose of OREO in an orderly, but timely fashion. These efforts have resulted in improvement in the Bank’s performance. Management, in conjunction with the Bank’s lending personnel, will continue to aggressively focus its resources and efforts on these segments of our business.”
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)||Mar. 31, 2012||Dec. 31, 2011||Sept. 30, 2011||June 30, 2011||Mar. 31, 2011|
|Interest income(not taxable equivalent)||$||1,768||$||1,750||$||1,843||$||1,959||$||1,938|
|Net interest income||1,560||1,528||1,611||1,714||1,647|
|Provision for loan losses||225||910||275||884||725|
|Net interest income after|
|provision for loan losses||1,335||618||1,336||830||922|
|Income before income taxes||(190||)||(819||)||(141||)||(631||)||(594||)|
|(Benefit)/Provision for income taxes||-||1||-||-||-|
|(In Thousands)||Mar. 31, 2012||Dec. 31, 2011||Sept. 30, 2011||June 30, 2011||Mar. 31, 2011|
|Net income - basic||$||(0.16||)||$||(0.66||)||$||(0.12||)||$||(0.51||)||$||(0.48||)|
|Weighted average shares used in basic||1,261||1,261||1,261||1,261||1,261|
|Net income - diluted||$||(0.16||)||$||(0.66||)||$||(0.12||)||$||(0.51||)||$||(0.48||)|
|Weighted average shares used in diluted||1,261||1,261||1,261||1,261||1,261|
|Book value at period end||$||5.05||$||5.22||$||5.89||$||6.00||$||6.49|
|Balance Sheet - At Period-End|
|Cash and due from banks||$||25,021||$||22,867||$||21,875||$||17,947||$||22,636|
|Investments and Fed fund sold||9,272||8,446||7,724||9,766||10,250|
|Allowance for loan losses||(2,748||)||(2,359||)||(3,130||)||(2,803||)||(2,561||)|
|Total Liabilities and Shareholders' equity||$||138,983||$||141,256||$||145,085||$||146,736||$||154,308|
|Asset Quality & Capital - At Period-End|
|Loans past due 90 days or more||-||-||-||-||-|
|Other real estate owned||2,974||2,927||3,194||4,036||3,927|
|Other bank owned assets||-||-||-||-||-|
|Total non-performing assets||$||8,450||$||11,853||$||12,785||$||10,345||$||11,974|
|Allowance for losses to loans, gross||2.77||%||2.28||%||2.86||%||2.51||%||2.25||%|
|Non-accrual loans to total loans, gross||5.53||%||8.61||%||8.76||%||5.66||%||7.08||%|
|Non-performing loans to total loans, gross||5.53||%||8.61||%||8.76||%||5.66||%||7.08||%|
|Non-performing asset to total assets||6.08||%||8.39||%||8.81||%||7.05||%||7.76||%|
|Allowance for losses to non-performing loans||50.18||%||26.43||%||32.63||%||44.43||%||31.83||%|
|Total risk-based capital ratio||11.09||%||10.78||%||11.15||%||10.92||%||11.27||%|
|Tier 1 risk-based capital ratio||9.82||%||9.52||%||9.88||%||9.66||%||10.00||%|
|Tier 1 leverage ratio||7.42||%||7.21||%||7.86||%||7.73||%||7.87||%|