Premier Service Bank Announces Earnings for the Quarter and Year Ended December 31, 2007
Premier Service Bank PSBK, a California state-chartered bank headquartered in Riverside, California, today announced net earnings for the year ended December 31, 2007 were $566 thousand, or $0.33 per diluted share, compared to net earnings of $1.539 million, or $1.23 per diluted share, for the year ended December 31, 2006.
The 63% decrease in net earnings was due to the bank becoming fully taxable for the entire 2007 year, compared to the bank being fully taxable for only the last quarter of 2006, resulting in a $435 thousand greater tax liability for 2007 compared to 2006, a $102 thousand decrease in the bank's net interest income in 2007 compared to 2006, and $633 thousand more non-interest expense in 2007 compared to 2006, offset by a loan loss provision in 2007 which was $101 thousand less than 2006 and $94 thousand more non-interest income in 2007 than 2006.
Net earnings for the fourth quarter of 2007 were $178 thousand, compared to net earnings of $158 thousand for the third quarter of 2007, and net earnings of $219 thousand for the fourth quarter of 2006. The increase in net earnings compared to the third quarter of 2007 resulted primarily from the growth within the bank's loan portfolio. The decrease in net earnings compared to the fourth quarter of 2006 resulted primarily from the increase in interest expense associated with the increase in interest rates paid on interest bearing deposits.
At December 31, 2007, the bank reported total assets of $139.3 million, representing a 2% increase over December 31, 2006. Deposits closed at $109.4 million, representing a 12% decline over the prior year-end. Non-interest bearing demand deposits totaled $38.4 million at December 31, 2007, and represented 35.1% of total deposits at that date. The bank's gross loan portfolio grew to $110 million, representing a 15% increase over year-end 2006. Unfunded credit commitments stood at $31.6 million at December 31, 2007, representing a 14% increase over the prior year-end. At year end, nonperforming assets represent 0.64% of total loans. The bank had no foreclosed real estate. At December 31, 2007, nonaccrual loans represented 0.64% of total loans. The allowance for credit losses totaled $1.26 million at December 31, 2007, or 1.14% of total loans as of that date.
Net interest margin for the year ended December 31, 2007 was 5.23%, a decrease of 0.52% compared to fiscal 2006. Net interest margin for the fourth quarter of 2007 was 5.29%, a decrease of 0.24% when compared to the third quarter of 2007 and a decrease of 0.29% when compared to the fourth quarter of 2006.
The bank remained well capitalized at December 31, 2007 and continued to have no sub-prime residential loans in its portfolio.
Kerry Pendergast, President and CEO of the bank, stated, "During the fourth quarter, we experienced solid loan growth which we believe will continue into 2008. We will continue to focus on our core competency, which is centered in developing long term banking relationships with our clients. Our fundamental business plan remains strong, and we are committed to making quality loans and controlling expenses."
Premier Service Bank is a California banking corporation with $139.3 million in assets as of December 31, 2007, with two offices, its headquarters office in Riverside and a full-service branch 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 on the Internet at http://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 continue 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-KSB, quarterly reports on Form 10-QSB and other reports filed by Premier Service Bank with the FDIC.
Financial Data - Premier Service Bank
(Unaudited)
Quarter Ended
-------------------------------------------------
(In Thousands) Dec. 31, Sept. 30, June 30, Mar 31, Dec. 31,
2007 2007 2007 2007 2006
-------------------- --------- ----------------------------- ---------
Interest income(not
taxable equivalent) $ 2,389 $ 2,324 $ 2,363 $ 2,364 $ 2,396
Interest expense 676 649 707 700 613
--------- --------- --------- --------- ---------
Net interest income 1,713 1,675 1,656 1,664 1,783
Provision for loan
losses 108 77 10 - 54
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 1,605 1,598 1,646 1,664 1,729
Non-interest income 180 190 178 140 153
Non-interest expense 1,516 1,531 1,656 1,607 1,483
--------- --------- --------- --------- ---------
Income before income
taxes 269 257 168 197 399
(Benefit)/Provision
for income taxes 91 99 60 75 180
--------- --------- --------- --------- ---------
Net income $ 178 $ 158 $ 108 $ 122 $ 219
--------- --------- --------- --------- ---------
Quarter Ended
-------------------------------------------------
(In Thousands) Dec. 31, Sept. 30, June 30, Mar 31, Dec. 31,
2007 2007 2007 2007 2006
-------------------- --------- ------------------- --------- ---------
Per share:
Net income - basic $ 0.14 $ 0.13 $ 0.09 $ 0.10 $ 0.18
Weighted average
shares used in
basic 1,255 1,255 1,251 1,226 1,220
Book value at period
end $ 10.46 $ 10.18 $ 9.93 $ 9.90 $ 9.69
Ending shares 1,255 1,255 1,255 1,238 1,220
Balance Sheet - At
Period-End
Cash and due from
banks $ 3,571 $ 6,546 $ 7,789 $ 10,346 $ 7,998
Investments and Fed
fund sold 21,813 23,836 29,553 41,206 29,188
Gross Loans 110,045 101,513 97,262 92,579 95,785
Deferred fees (369) (339) (276) (314) (226)
Allowance for loan
losses (1,259) (1,152) (1,075) (1,085) (1,105)
Net Loans 108,417 100,022 95,911 91,180 94,454
Other assets 5,531 5,326 5,440 5,253 5,313
--------- --------- --------- --------- ---------
Total Assets $139,332 $135,730 $138,693 $147,985 $136,953
--------- --------- --------- --------- ---------
Non-interest-bearing
deposits $ 38,356 $ 46,373 $ 47,742 $ 49,055 $ 45,835
Interest-bearing
deposits 71,059 65,927 77,872 86,117 78,663
Other liabilities 16,785 10,660 617 558 635
Shareholders' equity 13,132 12,770 12,462 12,255 11,820
--------- --------- --------- --------- ---------
Total
Liabilities and
Shareholders' $139,332 $135,730 $138,693 $147,985 $136,953
--------- --------- --------- --------- ---------
Asset Quality & Capital - At
Period-End
Non-accrual loans $ 700 $ - $ - $ - $ -
Loans past due 90
days or more $ - $ - $ 443 $ 4 $ 41
Other real estate
owned - - - - -
--------- --------- --------- --------- ---------
Total non-performing
assets $ 700 $ - $ 443 $ 4 $ 41
--------- --------- --------- --------- ---------
Allowance for losses
to loans, gross 1.14% 1.13% 1.11% 1.17% 1.15%
Non-accrual loans to
total loans, gross 0.64% N/A N/A N/A N/A
Non-performing asset
to total assets 0.50% N/A 0.32% N/A N/A
Allowance for losses
to non-performing
loans 179.86% N/A 242.66% N/A N/A
Total capital to
risk-adjusted
assets 12.08% 12.61% 12.52% 12.57% 12.20%
Tier one capital to
risk-adjusted
assets 10.96% 11.50% 11.47% 11.49% 11.10%
Equity to average
assets (leverage
ratio) 9.46% 9.52% 9.04% 8.64% 8.60%
Contact Information: Premier Service Bank Kerry L. Pendergast, President and CEO Jessica Lee, Executive Vice President and CFO 951-274-2400
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