-- Capital ratios in excess of all minimums required to be "Well
Capitalized" by regulatory agencies, with a Tier 1 leverage ratio of 31%
and a Total Risk-Based capital ratio of 39% at September 30, 2008.
Regulatory "Well Capitalized" definitions are 5% for the Tier 1 leverage
ratio and 10% for the Total Risk-Based capital ratio.
-- Total Assets at September 30, 2008 increased to $72 million, an
increase of $20 million or 39% from September 30, 2007. Assets were $72
million at September 30, 2008 and June 30, 2008.
-- Total Loans at September 30, 2008 increased to $55 million, an
increase of $21 million or 64% over third quarter 2007, and a $4 million or
7% increase over second quarter 2008.
-- Total Deposits at September 30, 2008 increased to $49 million, an
increase of $22 million or an 84% increase over third quarter 2007.
Deposits were $49 million at September 30, 2008 and June 30, 2008.
-- Nine Month Net Loss of $2,216,000 for 2008 versus a loss of $2,878,000
for the comparable period of 2007. For the nine month period that
represents a reduction of 23% or $662,000 from 2007 to 2008 respectively.
-- Third Quarter Net Loss of $894,000 versus $640,000 in the third
quarter 2007 and $660,000 in the second quarter of 2008. The third quarter
loss included some termination costs related to the previous CEO which are
non-recurring and an increase in provision for loan losses.
-- No real estate owned, and no loans in foreclosure.
-- No Fannie Mae or Freddie Mac preferred stock.
"We are pleased to announce that Scott A. Montgomery has joined the Bank
as Interim Chief Executive Officer and President and that Stephen Rolfe has
joined the Bank as Executive Vice President and Chief Credit Officer,"
commented Maria Contreras-Sweet, Chairwoman of Promérica Bank. Mr.
Montgomery is a seasoned business banker and will help lead our team
through the challenges of this economy. Mr. Montgomery has a track record
of providing strong leadership and enhanced business development
activities. He comes to Promerica with over 40 years of banking experience
and over 25 years of experience as a CEO. Mr. Rolfe comes to the Bank with
over 30 years of banking and credit administration leadership," stated
Contreras-Sweet.
"In the midst of wide ranging instability in the banking industry,
Promérica Bank continues to offer its clients safety and peace of mind
knowing that their Bank has capital well in excess of regulatory
requirements to be 'well capitalized,' while maintaining strong liquidity
and FDIC insurance to the maximum allowed by law," stated Mr. Montgomery.
"We believe our strength and stability offer security for our clients in
these uncertain times." He continued, "We are well positioned to continue
to provide capital to the small to medium sized company market place. We
are a part of the exciting redevelopment and expansion of the downtown Los
Angeles market. Outside our front window we can see approximately $1.4
billion in new projects under construction. Certainly challenges in the
economy remain and will continue into 2009, but we believe the challenges
will also provide opportunities for prudent lending and expansion of our
banking franchise."
Net income for the 2008 third quarter was impacted by the addition of
$226,000 to loan loss reserves during the period. The provision for the
2008 third quarter was $58,000 higher than for the same quarter in 2007.
The Allowance for Loan and Lease Losses represents 1.39% of total loans.
The third quarter of 2008 was also impacted by a severance expense of
$233,000.
PROMÉRICA BANK provides a full range of financial services, including
credit and deposit products, cash management, and internet banking for
businesses and high net worth individuals from its headquarters office at
888 S. Figueroa Street, Los Angeles, CA 90017. Information on products and
services may be obtained by calling (213) 613-5000 or visiting the Bank's
website at www.PROMERICAbank.com.
NOTE:
This news release contains forward-looking statements about the Bank for
which the Bank claims the protection of the safe harbor provisions
contained in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management's knowledge and belief
as of today and include information concerning the Bank's possible or
assumed future financial condition, and its results of operations, business
and earnings outlook. These forward-looking statements are subject to
risks and uncertainties. A number of factors, some of which are beyond the
Bank's ability to control or predict, could cause future results to differ
materially from those contemplated by such forward-looking statements.
These factors include (1) changes in accounting policies or procedures as
may be required by the Financial Accounting Standards Board or regulatory
agencies, (2) changes in interest rates, (3) significant changes in banking
laws or regulations, (4) increased competition in the Bank's markets, (5)
other-than-expected credit losses due to real estate cycles or other
economic events, (6) earthquake or other natural disasters affecting the
condition of real estate collateral or the business environment. In
addition, management cannot predict at this time the extent of the recent
economic downturn, and a slowing or worsening could adversely affect our
performance in a number of ways, including decreased demand for our
products and services and increased credit losses. Likewise, changes in
deposit interest rates, among other things, could slow the rate of growth
or put pressure on current deposit levels. Forward-looking statements
speak only as of the date they are made, and the Bank does not undertake to
update forward-looking statements to reflect circumstances or events that
occur after the date the statements are made.
PROMÉRICA BANK BALANCE SHEETS
(Dollars in thousands)
September 30, June 30, December 31, September 30,
2008 2008 2007 2007
=========== =========== =========== ===========
Unaudited Unaudited Audited Unaudited
Assets:
Cash and Due From
Banks $ 1,753 $ 1,444 $ 498 $ 416
Federal Funds Sold 9,990 11,995 17,365 15,785
Int-Bearing Balances
at Other Financial
Institutions 3,698 5,675 0 0
=========== =========== =========== ===========
Total Cash and
Cash Equivalents 15,441 19,114 17,863 16,201
=========== =========== =========== ===========
Loans Net of Deferred
Loan Fees/Costs 54,998 51,336 37,282 33,592
Allowance for Loan
Losses 762 603 476 359
=========== =========== =========== ===========
Loans Net of
Allowance for
Loan Losses 54,236 50,733 36,806 33,233
Total Other Assets 2,016 2,068 2,066 2,057
=========== =========== =========== ===========
Total Assets $ 71,693 $ 71,915 $ 56,735 $ 51,491
=========== =========== =========== ===========
Liabilities:
Non-Interest-Bearing
Demand Deposits $ 8,792 $ 7,186 $ 4,839 $ 3,590
Interest-Bearing
Demand Deposits (NOW
Deposits) 2,960 3,555 2,569 601
Money Market Deposits 10,979 11,684 9,385 8,835
Savings Deposits 164 37 22 65
Certificates of
Deposit 26,145 26,256 15,661 13,508
=========== =========== =========== ===========
Total
Interest-Bearing
Deposits 40,248 41,532 27,637 23,009
=========== =========== =========== ===========
Total Deposits 49,040 48,718 32,476 26,599
Accrued Interest
Payable and Other
Liabilities 791 552 512 452
=========== =========== =========== ===========
Total Liabilities 49,831 49,270 32,988 27,051
Shareholders' Equity:
Common Stock 27,245 27,245 27,245 27,245
Additional Paid in
Capital 923 813 592 482
Accumulated Deficit (6,306) (5,413) (4,090) (3,287)
=========== =========== =========== ===========
Total Shareholders'
Equity 21,862 22,645 23,747 24,440
=========== =========== =========== ===========
Total Liabilities
and Shareholders'
Equity $ 71,693 $ 71,915 $ 56,735 $ 51,491
=========== =========== =========== ===========
PROMÉRICA BANK STATEMENTS OF OPERATIONS
For the Quarters Indicated
(Dollars in thousands except per share data)
September 30, June 30, December 31, September 30,
2008 2008 2007 2007
=========== =========== =========== ===========
Unaudited Unaudited Audited Unaudited
Interest Income:
Interest and Fees on
Loans $ 972 $ 912 $ 793 $ 514
Interest on Federal
Funds Sold 56 95 168 224
Interest on Balances
at Other Financial
Institutions 26 19 0 0
Dividends on FHLB
Stock 0 6 0 0
=========== =========== =========== ===========
Total Interest
Income 1,054 1,032 961 738
Interest Expense:
Interest on Deposit
Accounts 240 257 266 165
=========== =========== =========== ===========
Net Interest Income 814 775 695 573
Provision for Loan
Losses 226 130 117 168
=========== =========== =========== ===========
Net Interest Income
After Provision
for Loan Losses 588 645 578 405
Non-Interest Income:
Non-Interest Income 24 24 11 11
Non-Interest Expense:
Salaries and
Employee Benefits 896 683 701 490
Stock Based
Compensation
Expense 111 111 111 111
Occupancy Expense 232 216 273 201
Operating Expense 267 319 307 254
=========== =========== =========== ===========
Total
Non-Interest
Expense 1,506 1,329 1,392 1,056
Net Loss from Bank
Operations (894) (660) (803) (640)
=========== =========== =========== ===========
Pre-tax Net Loss (894) (660) (803) (640)
Provision for Income
Taxes 0 1 0 0
Net Loss $ (894) $ (661) $ (803) $ (640)
=========== =========== =========== ===========
Loss per share -
basic and diluted
loss per share $ (0.33) $ (0.24) $ (0.29) $ (0.23)
=========== =========== =========== ===========
PROMÉRICA BANK STATEMENTS OF OPERATIONS
For the Year-to-Date Periods Indicated
(Dollars in thousands except per share data)
September 30, September 30,
2008 2007
============= =============
Unaudited Unaudited
Interest Income:
Interest and Fees on Loans $ 2,641 $ 1,657
Interest on Federal Funds Sold 336 941
Interest on Balances at Other Financial
Institutions 46 0
Dividends on FHLB Stock 6 0
============= =============
Total Interest Income 3,029 2,598
Interest Expense:
Interest on Deposit Accounts 814 533
============= =============
Net Interest Income 2,215 2,065
Provision for Loan Losses 402 445
============= =============
Net Interest Income After Provision
for Loan Losses 1,813 1,620
Non-Interest Income:
Non-Interest Income 69 47
Non-Interest Expense:
Salaries and Employee Benefits 2,241 2,135
Stock Based Compensation Expense 331 440
Occupancy Expense 678 819
Operating Expense 846 1,151
============= =============
Total Non-Interest Expense 4,096 4,545
Net Loss from Bank Operations (2,214) (2,878)
============= =============
Pre-tax Net Loss (2,214) (2,878)
Provision for Income Taxes 2 0
Net Loss $ (2,216) $ (2,878)
============= =============
Loss per share - basic and diluted loss
per share $ (0.81) $ (1.05)
============= =============
Contact Information: Contacts: Promérica Bank Maria Contreras-Sweet Chairwoman 213.787.2802 Scott Montgomery Interim CEO / President 213.787.2805 Frank E. Smith CFO 213.787.2804