ProAmerica Bank Reports 2014 First Quarter Earnings

LOS ANGELES, CA--(Marketwired - Apr 24, 2014) -  ProAmérica Bank (OTCQB: PMRA) today reported Net Income for the first quarter of 2014 of $76,000, or $0.03 per diluted common share. Net Income was $97,000, or $0.04 per diluted common share for the quarter ended March 31, 2013. Net Income for 2014 includes a provision for income taxes of $56,000; no income taxes were reported for 2013. "We are pleased to report improved operating income, strong loan growth and significantly improved asset quality for the first quarter of 2014," stated L. Bruce Mills, Jr., President and CEO. "We have a good foundation to build on for the remainder of the year," continued Mills.

"Our continued focus on our mission of providing capital to small/medium sized businesses and non-profit organizations has yielded tremendous results," stated Maria S. Salinas, newly elected Chairwoman of ProAmérica. "We look forward to building on our core values while improving returns to our shareholders, serving not only the Latino community but the Los Angeles market in general."

2014 First Quarter Highlights

• Three-month Operating Income (income before taxes and provision for loan losses) of $132,000, compared to an operating loss of $203,000 in the prior year first quarter, an increase of $335,000.
  
  
• Total Assets at March 31, 2014 were $164.1 million, an increase of $7.3 million or 5% from March 31, 2013.
  
  
• Total Loans at March 31, 2014 increased to $119.6 million, an increase of $17.3 million or 17% from March 31, 2013.
  
  
• Total Deposits at March 31, 2014 increased to $135.4 million, an increase of $2.4 million or 2% from March 31, 2013.
  
  
• Shareholders' Equity increased $4.7 million, or 21%, to $27.5 million at March 31, 2014, up from $22.8 million at March 31, 2013.
  
  
• Nonperforming assets were reduced to $196,000 at March 31, 2014, a 92% decrease from March 31, 2013.

Capital ratios were in excess of all minimums required to be "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage Ratio of 16.7% and a Total Risk-Based Capital Ratio of 20.0% at March 31, 2014. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital Ratio.

Financial Results
Net Income for the three months ended March 31, 2014 was $76,000, compared to $97,000 in 2013. Income from operations was $132,000 for the first quarter of 2014, as compared to a loss of $203,000 for the same period in 2013. Management believes income from operations is a better measure of core earnings performance.

Net Interest Income before the Provision for Loan Losses increased $201,000 for the first quarter of 2014 compared to the 2013 first quarter. The Net Interest Margin increased to 4.19% for the quarter ended March 31, 2014, up from 3.58% for the first quarter of 2013. The increase was due to a higher level of average loans as a percentage of average assets in 2014 combined with the reduction in non-performing loans.

No Provision for Loan Losses was required in the first quarter of 2014. A negative Provision for Loan Losses of $300,000 was recorded in the first quarter of 2013 due to improved asset quality.

Non-interest Income increased $59,000, or 57% in the first quarter of 2014 versus 2013 due to increased gains on the sales of SBA loans, higher loan fee income and an increase in deposit fee income. Gains on sales of SBA loans were $93,000 in 2014 and $77,000 in 2013.

Non-interest Expense for the three months ended March 31, 2014 was $1,556,000, compared with $1,631,000 for the 2013 first quarter. Increases in Salaries and Employee Benefits expense were offset by lower Occupancy Expense and Operating Expense. Salaries and Employee Benefits increased primarily as a result of increased sales incentives. Declines in Operating Expense were the result of incurring lower professional service fees and lower FDIC insurance assessments in 2014 compared to 2013.

The efficiency ratio (Total Non-Interest Expense divided by the sum of Net Interest Income and Non-Interest Income) was 92% for the 2014 first quarter, compared with 114% for the same period in 2013. The improvement was the result of higher revenues and lower expenses as discussed above.

Cash and Cash Equivalents declined $13.1 million from the first quarter of 2013 to 2014 in order to fund the increase in loans. Loans, before the allowance for loan losses, increased 17% to $119.6 million at March 31, 2014, compared to $102.3 million at March 31, 2013. Total Deposits increased 2% to $135.4 million at March 31, 2014, up from $133.0 million at March 31, 2013.

Asset Quality
Nonperforming Assets (the sum of loans past due 90 days and accruing, nonaccrual loans and other real estate owned) decreased to $196,000, or 0.1% of total assets at March 31, 2014, compared with $2,318,000, or 1.5% of total assets at March 31, 2013. All of the nonaccrual loans are current in their payments. The Allowance for Loan Losses was $2.5 million, or 2.1% of loans, at March 31, 2014, compared with $2.6 million, or 2.5% of loans, at March 31, 2013. The Bank had net recoveries to average loans outstanding of .02% in the first quarters of 2014 and 2013.

Capital Resources
Total Shareholders' Equity increased to $27.5 million at March 31, 2014, up from $22.8 million at March 31, 2013. The Bank's book value available to common shareholders per common share increased to $8.56 at March 31, 2014 from $6.91 at March 31, 2013.

At March 31, 2014, the Bank's Tier 1 Leverage Capital Ratio was 16.7% versus 15.0% at March 31, 2013. The Total Risk-based Capital Ratio was 20.0% as of March 31, 2014, versus 20.5% at March 31, 2013.

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,				%
				2014				2013				Change
				Unaudited				Unaudited
Assets:
	Cash and Due From Banks			$	1,842			$	1,481			24.4	%
	Federal Funds Sold				29,940				44,975			-33.4	%
	Interest-bearing Balances at Other Financial Institutions				9,235				7,708			19.8	%
		Total Cash and Cash Equivalents			41,017				54,164			-24.3	%
	Loans Net of Deferred Loan Fees/Costs				119,644				102,298			17.0	%
	Allowance for Loan Losses				2,498				2,575			-3.0	%
		Loans Net of Allowance for Loan Losses			117,146				99,723			17.5	%
	Premises and Equipment, net				893				1,017			-12.2	%
	Federal Home Loan Bank Stock				482				515			-6.4	%
	Other Real Estate Owned				0				0			NA
	Accrued Interest Receivable and Other Assets				4,610				1,471			213.4	%
		Total Assets		$	164,148			$	156,890			4.6	%
Liabilities:
	Non-Interest-Bearing Demand Deposits			$	30,957			$	23,164			33.6	%
	Interest-Bearing Demand Deposits (NOW Deposits)				3,853				2,264			70.2	%
	Savings and Money Market				35,181				47,190			-25.4	%
	Certificates of Deposit				65,429				60,424			8.3	%
		Total Interest-bearing Deposits			104,463				109,878			-4.9	%
		Total Deposits			135,420				133,042			1.8	%
	Other Borrowings				0				0			0.0	%
	Accrued Interest Payable and Other Liabilities				1,246				1,097			13.6	%
Total Liabilities					136,666				134,139			1.9	%
Shareholders' Equity:
	Common Stock				27,308				27,248			0.2	%
	Additional Paid in Capital				1,913				1,741			9.9	%
	Accumulated Deficit				(5,489	)			(9,988	)		-45.0	%
	SBLF Preferred Stock				3,750				3,750			0.0	%
		Total Shareholders' Equity			27,482				22,751			20.8	%
		Total Liabilities and Shareholders' Equity		$	164,148			$	156,890			4.6	%
		Tier 1 leverage			16.74	%			14.98	%
		Tier 1 risk-based capital			18.70	%			19.25	%
		Total risk-based capital			19.96	%			20.52	%

PROAMÉRICA BANK STATEMENT OF OPERATIONS
For the Periods Indicated
(Dollars in thousands except per share data)
					Three Months
For The Period Ended March 31,					2014			2013				% Change
					Unaudited			Unaudited
Interest Income:
	Interest and Fees on Loans				$	1,605		$	1,407			14.1	%
	Interest on Federal Funds Sold					14			24			-41.7	%
	Interest on Balances at Other Financial Institutions					9			11			-18.2	%
	Dividends on FHLB and PCBB Stock					8			3			166.7	%
			Total Interest Income			1,636			1,445			13.2	%
Interest Expense:
	Interest on Deposit Accounts					111			121			-8.3	%
	Net Interest Income					1,525			1,324			15.2	%
Provision / (Reversal) for Loan Losses						0			(300	)		NA
	Net Interest Income After Provision					1,525			1,624			-6.1	%
		(Reversal) for Loan Losses
Non-Interest Income:
	Non-Interest Income					163			104			56.7	%
Non-Interest Expense:
	Salaries and Employee Benefits					1,039			976			6.5	%
	Stock Based Compensation Expense					12			33			-63.6	%
	Occupancy Expense					149			152			-2.0	%
	Operating Expense					356			470			-24.3	%
			Total Non-Interest Expense			1,556			1,631			-4.6	%
	Pre-tax Income					132			97			36.1	%
Provision for Income Taxes						56			0			NA
	Net Income				$	76		$	97			-21.6	%
	Earnings per share - basic and diluted				$	0.03		$	0.04			-22.2	%

PROAMÉRICA BANK FINANCIAL HIGHLIGHTS
For the Periods Indicated
(Dollars in thousands except share and per share data)
				Three Months
For The Period Ended March 31,				2014				2013				% Change
				Unaudited				Unaudited
Per Share:
	Net income, basic and diluted			$	0.03			$	0.04			-22.2	%
	Book value - Common			$	8.56			$	6.91			23.9	%
Common Shares Outstanding
	End of period				2,771,000				2,751,000			0.7	%
	Average for period				2,771,000				2,751,000			0.7	%
Financial Ratios:
	Performance Ratios:
		Return on average assets			0.20	%			0.26	%		-23.1	%
		Return on average common equity			1.28	%			2.05	%		-37.6	%
		Net interest margin			4.19	%			3.58	%		17.0	%
		Efficiency ratio			92.18	%			114.22	%		-19.3	%
	Capital Adequacy Ratios (Period-end):
		Tier 1 leverage			16.74	%			14.98	%		11.7	%
		Tier 1 risk-based capital			18.70	%			19.25	%		-2.9	%
		Total risk-based capital			19.96	%			20.52	%		-2.7	%
Asset Quality Ratios:
	Allowance for loan and lease losses to:
		Total loans			2.09	%			2.52	%		-17.1	%
		Nonaccrual loans			1276.09	%			111.10	%		1048.6	%
	Nonperforming assets to:
		Total loans and other real estate owned			0.16	%			2.27	%		-93.0	%
		Total assets			0.12	%			1.48	%		-91.9	%
	Net charge-offs (recoveries) to average loans (annualized)				-0.02	%			-0.02	%		0.0	%
Asset Quality Measures:
	Nonaccrual loans (1)			$	196				2,318			-91.5	%
	Other real estate owned				0				0			NA
		Total nonperforming assets			196				2,318			-91.5	%
	(1) Nonaccrual loans less than 30 days past due			$	196				2,318			-91.5	%