ProAmerica Bank Reports 2016 First Quarter Results of Operations

LOS ANGELES, CA--(Marketwired - May 9, 2016) - ProAmérica Bank (OTCQB: PMRA) today reported Net Income of $202,000 for the first quarter of 2016, or $0.06 per diluted common share. Net Loss was $79,000, or $0.03 per diluted common share for the quarter ended March 31, 2015. Total Assets at March 31, 2016 were $185.2 million, an increase of $24.8 million or 15% from March 31, 2015. "We are pleased with the Bank's momentum as we continue to focus on growth and prepare for the pending merger with Pacific Commerce Bank," stated Sal Varela, Interim President and CEO.

2016 First Quarter Highlights

• Three-month Operating Income (income before taxes and provision for loan losses) of $335,000, compared to Operating Loss of $134,000 in the prior year first quarter, an increase of $469,000. The increase primarily resulted from a $171,000 increase in interest and fees on loans due to a $13.5 million increase in loans and less expense on nonrecurring items in first quarter of 2016 compared to the same period in 2015.
  
  
• Total Assets at March 31, 2016 were $185.2 million, an increase of $24.8 million or 15% from March 31, 2015.
  
  
• Total Loans at March 31, 2016 increased to $139.6 million, an increase of $13.5 million or 11% from March 31, 2015.
  
  
• Total Deposits at March 31, 2016 increased to $158.6 million, an increase of $27.5 million or 21% from March 31, 2015.
  
  
• Shareholders' Equity decreased $2.5 million, or 9%, to $25.5 million at March 31, 2016, from $28.0 million at March 31, 2015. The Bank redeemed $3.75 million in Small Business Lending Fund preferred stock from the U.S. Department of the Treasury, resulting in the decrease.
  
  
• Nonperforming assets remained low at $516,000 at March 31, 2016, up from $357,000 at March 31, 2015.
  
  
• Capital ratios were in excess of all minimums required to be "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage Ratio of 13.4% and a Total Risk-Based Capital Ratio of 17.6% at March 31, 2016. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital Ratio.
  
  

Financial Results
The Net Income for the three months ended March 31, 2016 was $202,000 compared to the Net Loss of $79,000 for the same period in 2015. The Operating Income was $335,000 for the first quarter of 2016, as compared to the Operating Loss of $134,000 for the same period in 2015. Management believes income from operations is a better measure of core earnings performance.

Net Interest Income before the Provision for Loan Losses increased $149,000 for the first quarter of 2016 compared to the 2015 first quarter. The Net Interest Margin decreased to 3.70% for the quarter ended March 31, 2016, down from 4.01% in the first quarter of 2015. The decrease was primarily due to the larger percentage of lower yielding Federal funds sold as a percentage of earning assets in 2016 as compared to 2015.

No Provision for Loan Losses was required in the first quarter of 2016 or 2015. 

Noninterest Income increased $59,000 or 123% in the first quarter of 2016 versus 2015 due to increased gains on the sales of SBA loans and the collection of loan referral fees. 

Noninterest Expense for the three months ended March 31, 2016 was $1,467,000 compared with $1,728,000 for the 2015 first quarter, a decrease of $261,000. First quarter of 2015 Noninterest Expense was impacted by nonrecurring personnel expenses.

The efficiency ratio (Total Noninterest Expense divided by the sum of Net Interest Income and Noninterest Income) was 81% for the 2016 first quarter, compared with 108% for the same period in 2015. The decrease in 2016 was the result of lower Noninterest Expenses. First quarter of 2015 Noninterest Expense was impacted by nonrecurring personnel expenses.

Cash and Cash Equivalents increased $12.5 million at March 31, 2016 compared to March 31, 2015. Loans, before the allowance for loan losses, increased 11% to $139.6 million at March 31, 2016, compared to $126.1 million at March 31, 2015. Total Deposits increased 21% to $158.6 million at March 31, 2016, up from $131.00 million at March 31, 2015. 

Asset Quality
Nonperforming Assets (the sum of loans past due 90 days and accruing, nonaccrual loans and other real estate owned) were $516,000 or 0.3% of total assets at March 31, 2016, compared with $357,000, or 0.2% of total assets at March 31, 2015. All of the nonaccrual loans are current in their payments. The Allowance for Loan Losses was $2.2 million, or 1.6% of loans, at March 31, 2016, compared with $2.1 million, or 1.7% of loans, at March 31, 2015. The Bank had net recoveries to average loans outstanding of 0.06% and 0.09% in the first quarters of 2016 and 2015, respectively.

Capital Resources
Total Shareholders' Equity decreased to $25.5 million at March 31, 2016 from $28.0 million at March 31, 2015. The Bank redeemed $3.75 million in Small Business Lending Fund preferred stock, resulting in the decrease. The Bank's book value available to common shareholders per common share increased to $8.84 at March 31, 2016, up from $8.77 at March 31, 2015. The Bank's Tier 1 Leverage Capital Ratio was 13.4% at March 31, 2016 and 16.7% at March 31, 2015. The Total Risk-Based Capital Ratio was 17.6% as of March 31, 2016, versus 20.3% at March 31, 2015. The Common Equity Tier One Capital Ratio, a new regulatory ratio under Basel III (Basel Committee on Bank Supervision guidelines for determining regulatory capital), was 16.4% at March 31, 2016. All capital ratios are well above regulatory requirements for a well-capitalized institution under the new requirements that took effect January 1, 2015.

Merger Update
ProAmérica Bank and Pacific Commerce Bancorp (OTC: PCBC) (the "Company"), parent company of Pacific Commerce Bank, has received all necessary regulatory approvals for the merger of the two banks. The transaction remains subject to and is conditioned upon receiving shareholder approvals from both institutions. The Company and ProAmérica Bank have their respective shareholder meetings scheduled for the second week of May and expect the transaction to close shortly thereafter.

The combined institution will have total assets of approximately $560 million upon the close and six offices from Downtown Los Angeles to south San Diego County. Under the terms of the agreement, Pacific Commerce Bank will operate ProAmérica's single branch office as ProAmérica Bank, a division of Pacific Commerce Bank. Upon the close of the transaction, Maria S. Salinas and Sal Varela, founders and directors of ProAmérica Bank will become directors of the Company and Pacific Commerce Bank.

ProAmérica Bank provides a full range of financial services, including credit and deposit products, SBA loan products, cash management, and internet banking for businesses, professionals, nonprofits and high net worth individuals from its headquarters office at 888 West Sixth Street, Second Floor, Los Angeles, CA 90017-2728. Information on products and services may be obtained by calling (213) 613-5000 or visiting the Bank's website at www.PROAMERICABANK.com.

NOTE:
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 ProAmérica 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 the following: ProAmérica Bank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in ProAmérica Bank's reports and filings with banking regulatory agencies. 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 ProAmérica Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

PROAMÉRICA BANK BALANCE SHEETS
(Dollars in thousands)
				March 31,				March 31,				%
				2016				2015				Change
				Unaudited				Unaudited
Assets:
	Cash and Due From Banks			$	1,456			$	1,713			-15.0	%
	Federal Funds Sold				36,540				17,695			106.5	%
	Interest-bearing Balances at Other Financial Institutions				5,394				11,531			-53.2	%
		Total Cash and Cash Equivalents			43,390				30,939			40.2	%
	Loans Net of Deferred Loan Fees/Costs				139,564				126,107			10.7	%
	Allowance for Loan Losses				2,236				2,147			4.1	%
		Loans Net of Allowance for Loan Losses			137,328				123,960			10.8	%
	Premises and Equipment, net				599				747			-19.8	%
	Federal Home Loan Bank Stock				599				568			5.5	%
	Other Real Estate Owned				0				0			NA
	Accrued Interest Receivable and Other Assets				3,280				4,162			-21.2	%
		Total Assets		$	185,196			$	160,376			15.5	%
Liabilities:
	Noninterest-bearing Demand Deposits			$	37,035			$	28,819			28.5	%
	Interest-bearing Demand Deposits (NOW Deposits)				3,684				2,986			23.4	%
	Savings and Money Market				40,402				27,740			45.6	%
	Certificates of Deposit				77,444				71,501			8.3	%
		Total Interest-bearing Deposits			121,530				102,227			18.9	%
		Total Deposits			158,565				131,046			21.0	%
	Other Borrowings				0				0			NA
	Accrued Interest Payable and Other Liabilities				1,181				1,289			-8.4	%
Total Liabilities					159,746				132,335			20.7	%
Shareholders' Equity:
	Common Stock				27,668				27,308			1.3	%
	Additional Paid in Capital				1,967				2,001			-1.7	%
	Accumulated Deficit				(4,185	)			(5,018	)		-16.6	%
	SBLF Preferred Stock				0				3,750			-100.0	%
		Total Shareholders' Equity			25,450				28,041			-9.2	%
		Total Liabilities and Shareholders' Equity		$	185,196			$	160,376			15.5	%
		Tier 1 leverage			13.07	%			16.70	%
		Common equity tier 1 capital			16.02	%			16.97	%
		Tier 1 risk-based capital			16.02	%			19.04	%
		Total risk-based capital			17.28	%			20.30	%

PROAMÉRICA BANK STATEMENT OF OPERATIONS
For the Periods Indicated
(Dollars in thousands except per share data)
				Three Months
For The Period Ended March 31,				2016			2015				% Change
				Unaudited			Unaudited
Interest Income:
	Interest and Fees on Loans			$	1,799		$	1,628			11	%
	Interest on Federal Funds Sold				44			14			214	%
	Interest on Balances at Other Financial Institutions				14			18			-22	%
	Dividends on FHLB and PCBB Stock				12			10			20	%
		Total Interest Income			1,869			1,670			12	%
Interest Expense:
	Interest on Deposit Accounts				174			124			40	%
	Net Interest Income				1,695			1,546			10	%
Provision / (Reversal) for Loan Losses					0			0			NA
	Net Interest Income After Provision (Reversal) for Loan Losses				1,695			1,546			10	%
Noninterest Income:
	Gain on Sale of SBA Loans				14			0			NA
	Noninterest Income				93			48			94	%
		Total Non-Interest Income			107			48			123	%
Noninterest Expense:
	Salaries and Employee Benefits				893			1,143			-22	%
	Stock Based Compensation Expense				0			54			-100	%
	Occupancy Expense				151			151			0	%
	Operating Expense				423			380			11	%
		Total Non-Interest Expense			1,467			1,728			-15	%
	Pre-tax Income (Loss)				335			(134	)		350	%
(Benefit) Provision for Income Taxes					133			(55	)		342	%
	Net Income (Loss)			$	202		$	(79	)		356	%
	Earnings (Loss) Per Share - basic			$	0.07		$	(0.03	)		312	%
	Earnings (Loss) Per Share - diluted			$	0.06		$	(0.03	)		307	%

PROAMÉRICA BANK FINANCIAL HIGHLIGHTS
For the Periods Indicated
(Dollars in thousands except per share data)
				Three Months
For The Period Ended March 31,				2016				2015				% Change
				Unaudited				Audited
Per Share:
	Net income (loss), basic			$	0.07			$	(0.03	)		312.1	%
	Net income (loss), diluted			$	0.06			$	(0.03	)		307.1	%
	Book value - Common			$	8.84			$	8.77			0.8	%
Common Shares Outstanding
	End of period				2,877,250				2,771,000			3.8	%
	Average for period				2,856,426				2,771,000			3.1	%
Financial Ratios:
	Performance Ratios:
		Return on average assets			0.43	%			-0.20	%		315.0	%
		Return on average common equity			3.19	%			-1.29	%		347.3	%
		Net interest margin			3.70	%			4.01	%		-7.7	%
		Efficiency ratio			81.41	%			108.41	%		-24.9	%
	Capital Adequacy Ratios (Period-end):
		Tier 1 leverage			13.07	%			16.70	%		-21.7	%
		Common equity tier 1 capital			16.02	%			16.97	%		-5.6	%
		Tier 1 risk-based capital			16.02	%			19.04	%		-15.9	%
		Total risk-based capital			17.28	%			20.30	%		-14.9	%
Asset Quality Ratios:
	Allowance for loan and lease losses to total loans				1.60	%			1.70	%		-5.9	%
	Allowance for loan and lease losses to nonperforming loans				433.62	%			600.82	%		-27.8	%
	Nonperforming loans to total loans				0.37	%			0.28	%		32.1	%
	Nonperforming assets to total assets				0.28	%			0.22	%		27.3	%
	Net charge-offs (recoveries) to average loans (annualized)				-0.06	%			-0.09	%		-33.3	%
Asset Quality Measures:
	Nonaccrual loans (1)			$	516			$	357			44.5	%
	Loans past due 90 days or more and still accruing				0				0			NA
	Other real estate owned				0				0			NA
		Total nonperforming assets			516				357			44.5	%
	(1) Nonaccrual loans less than 30 days past due				516				357			44.5	%