ProAmerica Bank Reports Results for First Quarter 2013; Founding Shareholder Edward P. Roski, Jr. to Re-Join the ProAmerica Bank Board of Directors

LOS ANGELES, CA--(Marketwired - Apr 25, 2013) - ProAmérica Bank (OTCQB: PMRA) today reported Net Income of $97,000, or 4 cents per share diluted, for the first quarter of 2013. 

2013 First Quarter Highlights

• Three-month Net Income of $97,000, compared to $238,000 in the prior year first quarter.
  
  
• Total Assets at March 31, 2013 totaled $156.9 million, an increase of $28.7 million or 22% from March 31, 2012.
  
  
• Total Loans at March 31, 2013 declined to $102.3 million, a decrease of $3.0 million or 3% from March 31, 2012.
  
  
• Total Deposits at March 31, 2013 increased to $133.0 million, an increase of $27.8 million or 26% from March 31, 2012.
  
  
• Nonperforming loans to total loans declined to 2.3% at March 31, 2013, as compared to 10.8% at March 31, 2012.
  
  
• Capital ratios are in excess of all minimums required to be "Well Capitalized", with a Tier 1 Leverage Ratio of 15.0% and a Total Risk-Based Capital Ratio of 20.5% at March 31, 2013. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital Ratio.

"The Bank has continued to perform with its ninth quarter of profitability out of the past ten quarters," stated L. Bruce Mills, Jr., President and CEO. "We saw dramatic improvement in asset quality with nonperforming assets dropping to $2.3 million at March 31, 2013 versus $11.4 million a year ago. This was achieved without significant losses and will increase the Bank's interest income going forward," continued Mills.

Executive Chairwoman Maria Contreras-Sweet commented, "Our first quarter results continue to demonstrate sustained profits and a strong balance sheet. Our asset quality has stabilized, we have strong capital and we have ample liquidity to fund our increasing loan growth. Our focus is on balancing growth with profitability as we continue to work towards our mission of serving the financial needs of businesses in the greater Los Angeles market area with an emphasis on Hispanic businesses. I am pleased, that after completing his term as Chairman of USC, Edward P. Roski, Jr. will return to the Board of Directors of ProAmérica Bank. Mr. Roski was a founding Board member and shareholder. Mr. Roski's return reflects the continued commitment he has to the Bank's mission and the confidence he has in the Bank's progress to date." Mr. Roski's appointment is subject to regulatory approval.

Financial Results
The adjusted loss from operations (income before provisions for loan losses and income taxes) was $203,000 for the first quarter of 2013, as compared to adjusted income of $238,000 for the same period in 2012. Management believes adjusted income from operations is a better measure of core earnings performance. The decline in adjusted earnings is discussed below.

Net Interest Income before the Provision for Loan Losses decreased $153,000 for the first quarter of 2013 compared to the 2012 first quarter. The Net Interest Margin declined to 3.6% for the quarter ended March 31, 2013, down from 4.6% for the 2012 first quarter. The decline was due to the decline in average loans compared to the previous year. Loan production for the first quarter of 2013 was $11.8 million in 2013 compared to $4.0 million in the same period of 2012. The Bank had several large loans pay down in the fourth quarter of 2012. Average loans represented 66.4% of average earning assets in the first quarter of 2013 versus 83.4% of loans for the same period in 2012."We saw good loan production in the first quarter of 2013 and we have a good pipeline of loans for the second quarter of 2013," stated Mills. "This, along with the large number of loans returning to performing status bodes well for increasing Net Interest Margin future quarters," continued Mills.

The Bank recorded a negative Provision for Loan Losses of $300,000 in the first quarter of 2013 due to the significant improvement in the level of nonperforming loans at March 31, 2013. There was no Provision for Loan Losses required in the same quarter of 2012. The Bank had a small amount of net recoveries in the first quarters of 2013 and 2012. 

Non-interest Income declined $44,000, or 30%, in 2013 as compared to 2012 as a result of a lower volume of SBA loans sold. "The Bank has a good number of SBA loans in the pipeline that we expect to originate and sell in the second quarter of 2013, which should bring non-interest income back to expected levels," stated Mills.

First quarter 2013 Non-interest Expense was $1,631,000, compared with $1,387,000 for the 2012 first quarter, an increase of $244,000, or 18%. Increases in Salaries and Employee Benefits and Stock Based Compensation expenses were $146,000 of the increase while Occupancy Expense contributed $28,000 and Other Operating Expense contributed $70,000 to the increase. "We have invested in additional personnel and marketing programs to support continued growth of the Bank and believe these investments will mean improved profitability in the future," commented Mills.

Loans, before the allowance for loan losses, declined 3% to $102.3 million at March 31, 2013, compared to $105.3 million at March 31, 2012. "Loans increased $5.8 million during the first quarter of 2013, as compared to December 31, 2012, due to the strong loan production in the first quarter," commented Mr. Mills.

Total Deposits increased 26% to $133.0 million at March 31 2013, from $105.2 million at March 31, 2012. Several of the Bank's larger depositors are required by law to have their deposits fully insured. The demise of the U.S. Treasury's Transaction Account Guarantee Program on December 31, 2012 resulted in the loss of unlimited FDIC insurance on demand deposit accounts. In December 2012, clients requiring insured deposits transferred approximately $30 million from demand deposit accounts to reciprocal money market and certificate of deposit products at the Bank, which allow for full FDIC insurance. The Bank has continued to maintain a low cost of funds at 0.39%, slightly higher than the 0.32% level a year ago.

Asset Quality
 Nonperforming Assets (the sum of loans past due 90 days and accruing, nonaccrual loans and other real estate owned) decreased to 1.5% of total assets at March 31, 2013, compared with 8.9% at March 31, 2012. All of the nonaccrual loans are current in their payments.

The Allowance for Loan Losses was $2.6 million, or 2.5% of loans, at March 31, 2013, compared with $3.1 million, or 2.9% of loans, at March 31, 2012. Net recoveries were nominal in the first quarters of 2013 and 2012. The Bank had no loans 30 days or more delinquent as of March 31, 2013.

Capital Resources
 Total Shareholders' Equity increased to $22.8 million at March 31, 2013 from $21.8 million at March 31, 2012. The Bank's book value available to common shareholders per common share increased to $6.91 at March 31, 2013, up from $6.57 at March 31, 2012.

At March 31, 2013, the Bank's Tier 1 Leverage Capital Ratio was 15.0% versus 16.8% at March 31, 2012. The Total Risk-based Capital Ratio was 20.5% as of March 31, 2013 and March 31, 2012.

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,				%
				2013				2012				Change
				Unaudited				Unaudited
Assets:
	Cash and Due From Banks			$	1,481			$	2,051			-27.79	%
	Federal Funds Sold				44,975				14,165			217.51	%
	Interest-bearing Balances at Other Financial Institutions				7,708				6,586			17.04	%
		Total Cash and Cash Equivalents			54,164				22,802			137.54	%
	Loans Net of Deferred Loan Fees/Costs				102,298				105,312			-2.86	%
	Allowance for Loan Losses				2,575				3,076			-16.29	%
		Loans Net of Allowance for Loan Losses			99,723				102,236			-2.46	%
	Premises and Equipment, net				1,017				1,106			-8.05	%
	Federal Home Loan Bank Stock				515				418			23.21	%
	Other Real Estate Owned				0				0			NA
	Accrued Interest Receivable and Other Assets				1,471				1,642			-10.41	%
		Total Assets		$	156,890			$	128,204			22.38	%
Liabilities:
	Noninterest-bearing Demand Deposits			$	23,164			$	33,664			-31.19	%
	Interest-bearing Demand Deposits (NOW Deposits)				2,264				3,354			-32.50	%
	Savings and Money Market				47,190				22,226			112.32	%
	Certificates of Deposit				60,424				45,965			31.46	%
		Total Interest-bearing Deposits			109,878				71,545			53.58	%
		Total Deposits			133,042				105,209			26.45	%
	Other Borrowings				0				0			NA
	Accrued Interest Payable and Other Liabilities				1,097				1,167			-6.00	%
Total Liabilities					134,139				106,376			26.10	%
Shareholders' Equity:
	Common Stock				27,248				27,245			0.01	%
	Additional Paid in Capital				1,741				1,716			1.46	%
	Accumulated Deficit				(9,988	)			(10,883	)		-8.22	%
	SBLF Preferred Stock				3,750				3,750			0.00	%
		Total Shareholders' Equity			22,751				21,828			4.23	%
		Total Liabilities and Shareholders' Equity		$	156,890			$	128,204			22.38	%
		Tier 1 leverage			14.98	%			16.75	%
		Tier 1 risk-based capital			19.25	%			19.28	%
		Total risk-based capital			20.52	%			20.54	%

PROAMÉRICA BANK STATEMENT OF OPERATIONS
For the Periods Indicated
(Dollars in thousands except per share data)
				Three Months
For The Period Ended March 31,				2013				2012			% Change
				Unaudited				Unaudited
Interest Income:
	Interest and Fees on Loans			$	1,407			$	1,554		-9.46	%
	Interest on Federal Funds Sold				24				7		242.86	%
	Interest on Balances at Other Financial Institutions				11				16		-31.25	%
	Dividends on FHLB and PCBB Stock				3				1		200.00	%
		Total Interest Income			1,445				1,578		-8.43	%
Interest Expense:
	Interest on Deposit Accounts				121				101		19.80	%
	Net Interest Income				1,324				1,477		-10.36	%
Provision (Negative Provision) for Loan Losses					(300	)			0		NA
	Net Interest Income After Provision for Loan Losses				1,624				1,477		9.95	%
Noninterest Income:
	Noninterest Income				104				148		-29.73	%
Noninterest Expense:
	Salaries and Employee Benefits				976				852		14.55	%
	Stock Based Compensation Expense				33				11		200.00	%
	Occupancy Expense				152				124		22.58	%
	Operating Expense				470				400		17.50	%
		Total Non-Interest Expense			1,631				1,387		17.59	%
	Pre-tax Income				97				238		-59.24	%
Provision for Income Taxes					0				0		NA
	Net Income			$	97			$	238		-59.24	%
	Earnings Per Share - Basic and Diluted			$	0.04			$	0.09		-59.24	%

PROAMÉRICA BANK FINANCIAL HIGHLIGHTS
For the Periods Indicated
(Dollars in thousands except share data)
				Three Months
For The Period Ended March 31,				2013				2012				% Change
				Unaudited				Unaudited
Per Share:
	Net income, basic and diluted			$	0.04			$	0.09			-59.24	%
	Book value - Common			$	6.91			$	6.57			5.18	%
Common Shares Outstanding
	End of period				2,751,000				2,750,000			0.04	%
	Average for period				2,751,000				2,750,000			0.04	%
Financial Ratios:
	Performance Ratios:
		Return on average assets			0.26	%			0.73	%		-64.38	%
		Return on average common equity			2.05	%			5.26	%		-61.03	%
		Net interest margin			3.63	%			4.59	%		-20.92	%
		Efficiency ratio			114.15	%			85.35	%		33.74	%
	Capital Adequacy Ratios (Period-end):
		Tier 1 leverage			14.98	%			16.75	%		-10.57	%
		Tier 1 risk-based capital			19.25	%			19.28	%		-0.16	%
		Total risk-based capital			20.52	%			20.54	%		-0.10	%
Asset Quality Ratios:
	Allowance for loan and lease losses to total loans				2.52	%			2.92	%		-13.70	%
	Allowance for loan and lease losses to nonaccrual loans				111.10	%			27.10	%		309.96	%
	Nonperforming loans to total loans				2.27	%			10.78	%		-78.94	%
	Nonperforming assets to total assets				1.48	%			8.85	%		-83.28	%
	Net charge-offs (recoveries) to average loans (annualized)				-0.02	%			-0.01	%		100.00	%
Asset Quality Measures:
	Nonaccrual loans (1)				2,318				11,350			-79.58	%
	Other real estate owned				0				0			NA
		Total nonperforming assets			2,318				11,350			-79.58	%
(1) Nonaccrual loans less than 30 days past due					2,318				7,185			-67.74	%