SANTA MONICA, Calif., Nov. 16, 1999 (PRIMEZONE) -- Professional Bancorp (AMEX:MDB), the holding company for First Professional Bank, N.A., today reported a net loss for the third quarter ended September 30, 1999 of $2.4 million, or $1.17 per share, on interest income of $4.8 million, compared with net income of $512,000, or $0.22 per diluted share, a year ago.
For the nine months ended September 30, 1999, the company reported a net loss of $2.3 million, or $1.14 per share, on interest income of $13.5 million, compared with net income a year earlier of $1.0 million, or $0.52 per diluted share, on interest income of $12.5 million.
Gross and net interest income for the nine months ended September 30, 1999 increased $1.1million and $1.2million respectively over the same period in 1998. Increased income levels are primarily due to the aggregate loan growth of 26.5% or $31.3 million. The company and the bank, at September 30, 1999, were considered "well-capitalized" and exceeded all applicable minimum capital requirements.
The company attributed the net loss in the quarter and nine months to an increase in provisions for loan losses, recording increases of $4.4 million and $5.6 million for the third quarter and nine-month period, respectively.
Gene Gaines, chief executive officer of First Professional Bank, said, "The additional provisions to the loan loss reserve relate to a very few large loans, mostly outside the bank's target market, which may take an extended period of time to resolve."
He noted that the increased size of the bank's average credit relationship, which has added substantially to the growth of the loan portfolio, contributed to the increased provision. Gaines further stated, "The dynamics of the health care industry and the increased complexity of the credits extended to this sector also made increases in the loan loss provision prudent."
"The fundamentals of the bank are strong, notwithstanding the year-to-date results. Our enhanced management team is focused on aggressively addressing the short-term challenges facing the bank. Successful efforts in meeting these challenges will enable us to expand First Professional's franchise value and capitalize on its niche market. Concurrently, we are continuing our pursuit of strategic alternatives - a process we began earlier this year. Our ultimate goal is to service our customers and enhance the value of the company for our shareholders," Gaines said.
Professional Bancorp, Inc., based in Santa Monica, California, is a holding company whose subsidiary, First Professional Bank, N.A., is a commercial bank that provides a variety of financial services and products to the health care community. The bank's majority owned subsidiary, Professional Bancorp Mortgage, Inc., provides retail and commercial mortgage brokerage products and services.
Certain information set forth in this press release may constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties. The Company's actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause such a difference include, but are not limited to, economic conditions, competition in the geographic and business areas in which the Company conducts operations, fluctuations in interest rates, credit quality, year 2000 data systems compliance, and government regulations. For additional information concerning these factors, see "Item 1. Business - Factors That May Affect Results" contained in the Company's Annual Report on Form 10K for the year ended December 31, 1998.
Professional Bancorp, Inc. and Subsidiary
Consolidated Balance Sheets
Selected Financial Data
in thousands
(unaudited)
Sept. 30, Dec. 31,
1999 1998
Cash and cash equivalents 50,883 31,965
Securities available-for-sale 47,311 80,891
Securities held-to-maturity 19,431 24,081
Loans:
Commercial 113,408 93,952
Real estate secured commercial 26,736 11,698
Equity lines of credit 4,320 5,931
Other lines of credit 3,205 4,817
Installment 1,501 1,482
Lease financing --- 32
Gross loans 149,170 117,912
Allowance for loan losses 6,213 2,200
Deferred loan fees, net 216 193
Net Loans 142,741 115,519
Other assets 9,672 7,245
Total assets $ 270,038 $259,701
Deposits:
Demand, noninterest-bearing $ 101,129 $109,422
Demand, interest-bearing 14,252 16,710
Savings and money market 92,789 75,501
Time deposits 36,305 28,948
Total deposits 244,475 230,581
Convertible notes 748 1,116
Accrued interest payable
and other liabilities 2,353 2,683
Total liabilities 247,576 234,380
Shareholders' equity 23,539 23,592
Unrealized loss on securities
available-for-sale, net of taxes (1,077) (271)
Total shareholders' equity 22,462 25,321
Total liabilities and
shareholders' equity $ 270,038 $259,701
Professional Bancorp, Inc. and Subsidiary
Consolidated Statements of Operations
in thousands (except share data)
(Unaudited)
3 Months Ended 9 Months Ended
Sept. 30, Sept. 30,
1999 1998 1999 1998
Total interest income 4,801 4,343 13,540 12,472
Total interest expense 864 794 2,463 2,591
Net interest income 3,937 3,549 11,077 9,881
Provision for loan losses 4,426 --- 5,598 ---
Net interest income after provision
for loan losses (489) 3,549 5,479 9,881
Other operating income 458 418 1,422 1,345
Other operating expenses 3,581 3,096 10,480 9,524
Earnings before taxes (3,612) 871 (3,579) 1,702
Provision for income
taxes expense (benefit) (1,249) 359 (1,292) 661
Net earnings $ (2,363) $ 512 $(2,287) $ 1,041
Earnings per share:
Basic $ (1.17) $ 0.26 $ (1.14) $ 0.62
Diluted $ (1.17) $ 0.22 $ (1.14) $ 0.52
Sept. 30, Dec. 31,
1999 1998
Other Financial Information:
Total nonperforming assets $ 4,597 $ 1,631
Allowance for loan losses as a percent
of nonperforming loans 43.70 pct 161.88 pct
Nonperforming loans to total loans 2.90 pct 1.15 pct
Capital Ratios
Leverage 8.76 pct 9.59 pct
Tier 1 risk based 13.24 pct 17.31 pct
Total risk based 14.93 pct 19.32 pct
CONTACTS: Gene Gaines, CEO
First Professional Bank
(310) 458-1521
Gary S. Maier/ Steven D. Stern
Pondel/Wilkinson Group
(310) 207-9300