Business & Finance
Business and Finance
Business and Finance
Thu, March 19, 2009
Wed, March 18, 2009
Tue, March 17, 2009 Promerica Bank: Promerica Bank Reports 2008 Results of Operations
LOS ANGELES, CA--(Marketwire - March 17, 2009) - Promérica Bank (
Total assets increased by $16.8 million to $73.5 million, a 30% increase for the year ended December 31, 2008. Strong loan growth of $18.5 million represented a solid 50% increase in the Bank's loan portfolio for the year ended December 31, 2008. Total loans at December 31, 2008 were $55.8 million compared with $37.3 million at December 31, 2007.
Promérica Bank recently announced the appointments of John H. Quinn as President and CEO effective February 23, 2009, and of Stephen M. Rolfe as Executive Vice President and Chief Credit Officer. They join Frank Smith who continues to serve Promérica Bank as the Chief Financial Officer. "After an extensive search, the Board selected Mr. Quinn as the ideal candidate because of his vast knowledge and experience with our target clientele, products and services, and the Southern California region. Mr. Quinn is well-versed in small business banking, having led three banks in national and international settings. Mr. Rolfe will oversee all credit-related activities including credit approval, credit policy, loan servicing and lending compliance. Mr. Rolfe comes to the Bank with diversified experience in risk management including assignments in credit approval and administration, commercial loan workouts and risk examination. Mr. Smith continues to capably manage the overall financial, investment strategies and the compliance of the institution. The Executive team's combination of strong leadership, relationship-managing skills and sound financial management will be invaluable to our investors and clients alike," affirmed Chairwoman Maria Contreras-Sweet.
"I am honored by the confidence the Board has in me and I am excited by the possibilities for Promérica Bank. I look forward to building upon the robust reputation the Bank has created in the Los Angeles community. Promérica Bank represents a unique and exciting opportunity to focus on improving the lives of our small business, non-profit and professional communities in Los Angeles and the surrounding areas. 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. Quinn. "We believe our strength and stability offer security for our clients in these uncertain times, and our size enhances our customer service qualities." He continued, "We are well positioned to continue to provide capital to the small to medium sized company market place. We are also part of the exciting redevelopment and expansion of the downtown Los Angeles market, with approximately $1.4 billion in new projects under construction right outside our front door. Certainly challenges in the economy will be with us all for some time to come, but we believe those challenges will also provide opportunities for our customers, for prudent lending and for the expansion of our banking franchise."
Mr. Quinn added, "The entire Promérica Bank team, including its staff, Directors and Chairwoman, Maria Contreras-Sweet, is dedicated to providing superior customer service and thereby delivering value to our customers, depositors and stakeholders. I look forward to helping Promérica Bank achieve its strategic objectives."
Total capital at year end 2008 was $21.2 million. The Bank's Tier 1 Leverage Ratio of 29.5% exceeds all regulatory requirements and guidelines to be "well capitalized."
The Bank reported a net loss for the year ended December 31, 2008 of $2.9 million. The loss for the year ended December 31, 2008 included the recognition of $311,000 of stock based compensation expense as required by SFAS 123R, which required the expensing of the value of stock options granted. This is a non-cash expense and does not have a net impact to the capital of the Bank as the amount expensed increases the Bank's capital accounts. Another significant factor was a provision for loan losses for the year of $637,000, driven by the strong loan growth which required a sufficient loan loss provision to protect the Bank from potential future losses.
The allowance for loan losses was $943,000 at December 31, 2008, an increase of $476,000 from December 31, 2007. The ratio of the allowance for loan losses to total loans was 1.7% at December 31, 2008 which compared favorably to industry standards.
Promérica Bank provides a full range of financial services, including credit and deposit products, cash management, and internet banking for business 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) December 31, December 31, 2008 2007 ----------- ----------- Audited Audited Assets: Cash and Due From Banks $ 1,239 $ 498 Federal Funds Sold 11,230 17,365 Time Deposits in Other Financial Institutions 4,180 0 ----------- ----------- Total Cash and Cash Equivalents 16,649 17,863 ----------- ----------- Loans Net of Deferred Loan Fees/Costs 55,804 37,282 Allowance for Loan Losses 943 476 ----------- ----------- Loans Net of Allowance for Loan Losses 54,861 36,806 Premises and Equipment, net 1,184 1,548 Federal Home Loan Bank Stock 134 0 Accrued Interest Receivable and Other Assets 660 518 ----------- ----------- Total Assets $ 73,488 $ 56,735 ----------- ----------- Liabilities: Non-Interest-Bearing Demand Deposits $ 8,479 $ 4,839 Interest-Bearing Demand Deposits (NOW Deposits) 3,320 2,569 Savings and Money Market 12,888 9,407 Certificates of Deposit 26,841 15,661 ----------- ----------- Total Interest-Bearing Deposits 43,049 27,637 ----------- ----------- Total Deposits 51,528 32,476 Accrued Interest Payable and Other Liabilities 759 512 ----------- ----------- Total Liabilities 52,287 32,988 Shareholders' Equity: Common Stock 27,245 27,245 Additional Paid in Capital 904 592 Accumulated Deficit (6,948) (4,090) ----------- ----------- Total Shareholders' Equity 21,201 23,747 ----------- ----------- Total Liabilities and Shareholders' Equity $ 73,488 $ 56,735 ----------- ----------- Tier 1 Leverage Ratio 29.5% 44.5% Tier 1 Risk-based Capital Ratio 36.2% 53.3% Total Risk-based Capital Ratio 37.5% 54.5% PROMÉRICA BANK STATEMENTS OF OPERATIONS For the Periods Indicated (Dollars in thousands except per share data) Year Ended Year Ended December 31, December 31, 2008 2007 ----------- ----------- Audited Audited Interest Income: Interest and Fees on Loans $ 3,594 $ 1,638 Interest on Federal Funds Sold 354 940 Interest on Balances at Other Financial Institutions 65 0 ----------- ----------- Total Interest Income 4,013 2,578 Interest Expense: Interest on Deposit Accounts 1,025 533 ----------- ----------- Net Interest Income 2,988 2,045 Provison for Loan Losses 637 444 ----------- ----------- Net Interest Income After Provision 2,351 1,601 for Loan Losses Non-Interest Income: Non-Interest Income 125 65 Non-Interest Expense: Salaries and Employee Benefits 2,994 2,135 Stock Based Compensation Expense 311 592 Occupancy Expense 910 818 Operating Expense 1,117 999 ----------- ----------- Total Non-Interest Expense 5,332 4,544 Net Loss from Bank Operations (2,856) (2,878) ----------- ----------- Pre-tax Net Loss (2,856) (2,878) Provision for Income Taxes 1 0 Net Loss $ (2,857) $ (2,878) ----------- ----------- Loss per share - basic and diluted loss per share $ (1.04) $ (1.04) ----------- -----------
