RIVERSIDE, Calif.--(BUSINESS WIRE)--
Premier Service Bank, Riverside, California (OTC BB:PSBK) today announced its unaudited financial results for the second quarter of 2012.
For the quarter ended June 30, 2012, the bank reported a net loss of $166 thousand, or <0.14> per diluted share, compared to a net loss of $631 thousand, or <$0.51> per diluted share for the quarter ended June 30, 2011. The improvement in earnings between the respective periods is primarily attributed to the decrease in the provision for loan losses, partially offset by the decrease in net interest income as a result of the lower amount of total loans. There was no provision to the allowance for loan losses for the second quarter of 2012, due to the recovery of prior charge-offs and the decrease in the loan portfolio, compared to a provision of $884 thousand for the same period in 2011.
At June 30, 2012, the Bank had $5.5 million of non-performing loans, representing 5.70% of the Bank’s total loans, compared to $6.3 million of non-performing loans, or 5.66% of total loans, at June 30, 2011. The Bank had foreclosed real estate of $3.2 million at June 30, 2012, compared to foreclosed real estate of $4 million at June 30, 2011. At June 30, 2012, non-accrual loans totaled $5.5 million, representing 5.70% of total loans at that date, compared to non-accrual loans of $6.3 million at June 30, 2011, representing 5.66% of total loans at that date. The allowance for loan losses totaled $2.91 million at June 30, 2012, or 3.03% of total loans as of that date, compared to $2.80 million at June 30, 2011, or 2.51% of total loans as of that date.
At June 30, 2012, the Bank had total assets of $137 million, representing a decrease of $9.6 million or 6.52% compared to total assets of $146.7 million at June 30, 2011. The Bank had $16 million in FHLB borrowings at June 30, 2012, representing a decrease of $4 million or 20% from FHLB borrowings of $20 million at June 30, 2011. Total deposits at June 30, 2012 were $110 million, representing a decrease of 3.77% compared to total deposits of $114.3 million at March 31, 2011. Non-interest bearing demand deposits totaled $42.4 million at June 30, 2012, representing 38.55% of total deposits at that date, compared to $43.8 million of non-interest bearing demand deposits at June 30, 2011, which represented 38.32% of total deposits at that date.
The Bank’s gross loan portfolio decreased to $96.1 million at June 30, 2012, representing a 13.83% decrease compared to gross loans of $111.5 million at June 30, 2011. Unfunded credit commitments stood at $7.9 million at June 30, 2012, representing a 24.77% decrease compared to unfunded commitments of $10.5 million at June 30, 2011.
The Bank’s net interest margin for the quarter ended June 30, 2012 was 4.74%, a decrease of 39 basis points as compared to the net interest margin of 5.13% for the second quarter of 2011.
Total shareholders’ equity at June 30, 2012 was $10.3 million, representing a decrease of $1.4 million, or 11.58% compared to total shareholders’ equity of $11.7 million at June 30, 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 June 30, 2012, these capital ratios were 7.39% and 11.27%, respectively. As a result, the Bank was not in compliance, as of June 30, 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 June 30, 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. Nasdaq: (FCAL) (“FCAL”), 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, “We are pleased to report a continuing decline in delinquent loans, which, in most instances, is fairly representative of the directional trends we see occurring within the Bank’s loan portfolio. For the quarter ended June 30, 2012, the Bank’s delinquency ratio was 2.32%, compared to 3.65% at March 31, 2012; it also compared favorably to the 4.48% delinquency ratio reported at June 30, 2011.”
Pendergast went on to say, “The Bank’s allowance for loan losses totaled $2.91 million at June 30, 2012 or 3.03% of total loans as of that date, with a reported surplus of $957 thousand. Year to date provision expenses have totaled $225 thousand, as compared to provision expenses totaling $1.609 million for the same six-month period ended June 30, 2011. Improving delinquency ratios, “newly identified - problem loans” trending downward and a general decline in borrower issues would suggest that the Bank’s loan portfolio is beginning to stabilize.”
Pendergast said in closing, “While the level of non-performing loans increased by $211 thousand or 2.50% for the quarter, when compared to June 30, 2011, the overall level of non-performing loans has been reduced by $1.684 million or 16.28%. Management is actively engaged in the oversight and disposition of OREO and believes that the market in the Inland Empire is positioned to accommodate more sales activity.”
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 for the year ended December 31, 2011 and its quarterly report on Form 10-Q for the quarter ended March 31, 2012, as filed by Premier Service Bank with the FDIC. On May 7, 2012, the Bank filed a Form 15, Certification and Notice of Termination of Registration under Section 12(g) of the Securities Exchange Act of 1934, with the FDIC. As a result of that filing, the bank's reporting obligations under Section 12(a) of the Exchange Act were immediately suspended, making it no longer necessary to file forms such as Forms 10-K, 10-Q, or 8-K after May 7, 2012. The last form filed by the Bank with the FDIC was its quarterly report on Form 10-Q for the quarter ended March 31, 2012.
See the unaudited Financial Data:
|Financial Data - Premier Service Bank|
|(In Thousands)||June 30, 2012||Mar. 31, 2012||Dec. 31, 2011||Sept. 30, 2011||June 30, 2011|
Interest income (not taxable equivalent)
|Net interest income||1,478||1,560||1,528||1,611||1,714|
|Provision for loan losses||-||225||910||275||884|
|Net interest income after|
|provision for loan losses||1,478||1,335||618||1,336||830|
|Income before income taxes||(165||)||(190||)||(819||)||(141||)||(631||)|
|(Benefit)/Provision for income taxes||1||-||1||-||-|
|(In Thousands)||June 30, 2012||Mar. 31, 2012||Dec. 31, 2011||Sept. 30, 2011||June 30, 2011|
|Net income - basic||$||(0.14||)||$||(0.16||)||$||(0.66||)||$||(0.12||)||$||(0.51||)|
|Weighted average shares used in basic||1,261||1,261||1,261||1,261||1,261|
|Net income - diluted||$||(0.14||)||$||(0.16||)||$||(0.66||)||$||(0.12||)||$||(0.51||)|
|Weighted average shares used in diluted||1,261||1,261||1,261||1,261||1,261|
|Book value at period end||$||4.90||$||5.05||$||5.22||$||5.89||$||6.00|
|Balance Sheet - At Period-End|
|Cash and due from banks||$||28,600||$||25,021||$||22,867||$||21,875||$||17,947|
|Investments and Fed fund sold||6,935||9,272||8,446||7,724||9,766|
|Allowance for loan losses||(2,907||)||(2,748||)||(2,359||)||(3,130||)||(2,803||)|
|Total Liabilities and Shareholders' equity||$||137,169||$||138,983||$||141,256||$||145,085||$||146,736|
|Asset Quality & Capital - At Period-End|
|Loans past due 90 days or more||-||-||-||-||-|
|Other real estate owned||3,189||2,974||2,927||3,194||4,036|
|Other bank owned assets||-||-||-||-||-|
|Total non-performing assets||$||8,661||$||8,450||$||11,853||$||12,785||$||10,345|
|Allowance for losses to loans, gross||3.03||%||2.77||%||2.28||%||2.86||%||2.51||%|
|Non-accrual loans to total loans, gross||5.70||%||5.53||%||8.61||%||8.76||%||5.66||%|
|Non-performing loans to total loans, gross||5.70||%||5.53||%||8.61||%||8.76||%||5.66||%|
|Non-performing asset to total assets||6.31||%||6.08||%||8.39||%||8.81||%||7.05||%|
|Allowance for losses to non-performing loans||53.13||%||50.18||%||26.43||%||32.63||%||44.43||%|
|Total risk-based capital ratio||11.27||%||11.09||%||10.78||%||11.15||%||10.92||%|
|Tier 1 risk-based capital ratio||10.00||%||9.82||%||9.52||%||9.88||%||9.66||%|
|Tier 1 leverage ratio||7.39||%||7.42||%||7.21||%||7.86||%||7.73||%|