Plaza Bancorp Announces 2015 Third Quarter's Financial Results (unaudited)
IRVINE, CA--(Marketwired - Oct 27, 2015) - Plaza Bancorp (OTCBB: PLZZ) (the "Company"), the holding company of Plaza Bank (the "Bank"), reported net income for the third quarter of 2015, the first full reporting period after the merger with Manhattan Bancorp, of $2.1 million, or $0.07 per diluted share. The Company's annualized return on average assets and return on average equity for the quarter ended September 30, 2015 were 0.82% and 8.30%, respectively.
Due to the merger with Manhattan Bancorp and the common ownership of the two institutions, the accounting method used for reporting for the nine months ended September 30, 2015 is the pooling of interest method which combines the results of the two entities. For the first three quarters of 2015, the Company reported net income of $1.3 million, or $0.04 per diluted share. The annualized return on average assets and return on average equity for the Company for the nine months ended September 30, 2015 were 0.16% and 1.52%, respectively. The Company's results for the first nine months of 2015 include $4.9 million in merger related expenses.
Gene Galloway, Plaza Bank's President and Chief Executive Officer, commenting on the third quarter and the effects of the merger with Manhattan Bancorp and Bank of Manhattan, N.A. stated, "Both the balance sheet and income statements are stable three months after the merger. This bodes well for the balance of the year and looking into 2016. Since the merger, total deposits have increased by $10 million and loans have fallen by $18 million, but our loan pipelines are growing and we anticipate strong loan growth during the fourth quarter."
In conclusion, Mr. Galloway said, "September saw the opening of our eighth location in San Diego. As a result, we have a great presence in Southern California. This coupled with our Las Vegas facility gives us a unique footprint in these important economic markets."
Highlights for quarter ended September 30, 2015 included:
In September, the Bank opened its eighth regional office in San Diego.
Loan originations for the Bank in the third quarter were $71.3 million.
For the quarter the Bank recovered $34,000 of prior period charge-offs and had zero loans charge-offs.
During the quarter, the Bank sold $12.2 million of SBA 7a loans that generated $865,000 in gains.
For the quarter, the Company's and Bank's net interest margin ("NIM") were 4.45% and 4.66%, respectively. The 21 basis point difference in the NIM between the two entities is due to the $25.0 million in subordinated debentures issued by the Company On June 26, 2015 as part of its acquisition of Manhattan Bancorp.
The Company's efficiency ratio for the quarter was 69%.
Net interest income for the quarter ended September 30, 2015 totaled $11.0 million. Loan interest income totaled $12.3 million, the average of total outstanding loans for the quarter was $839.0 million and the annualized yield was 5.80%. Interest expense related to deposits was $951,000 for the quarter, or 43 basis points annualized. The interest expense related to the subordinated debentures for the quarter was $445,000, or 7.125% annualized.
The Company recorded a $209,000 provision for loan losses during the third quarter of 2015. This provision was primarily related to $17.1 million in loans where the loan grade classification was downgraded. Non-accrual loans at September 30, 2015 totaled $1.9 million with only two non-accrual loans totaling $676,000 being 30 days or more past due.
Non-interest income for the third quarter of 2015 was $2.4 million. Non-interest income for the third quarter is primarily comprised of net gain from the sale of loans of $865,000, loan servicing income of $344,000, deposit fee income of $302,000, loan referral fee income of $221,000 and other fee income totaling $678,000.
The third quarter of 2015 non-interest expense totaled $9.4 million. Merger related professional expenses in the third quarter totaled $577,000.
For the third quarter of 2015, the Company's effective tax rate was 43.4%, for a total tax expense of $1.6 million for the quarter.
At September 30, 2015, the Company's ratio of tangible common equity to total assets was 8.27%, with a tangible book value of $3.14 per share and a book value per share of $3.47.
At September 30, 2015, the Bank exceeded all regulatory capital requirements with a ratio for tier 1 leverage capital of 10.12%, for common equity tier 1 risk-based capital of 11.56%, tier 1 risked-based capital of 11.56% and total risk-based capital of 12.80%. These capital ratios exceeded the "well capitalized" standards defined by the federal banking regulators of 5.00% for tier 1 leverage capital, 6.5% for common equity tier 1 risk-based capital, 8.00% for tier 1 risk-based capital and 10.00% for total risk-based capital. At September 30, 2015, the Company had a ratio for tier 1 leverage capital of 8.27%, common equity tier 1 risk-based capital of 9.44%, tier 1 risk-based capital of 9.44% and total risk-based capital of 13.46%.
About Plaza Bancorp
Plaza Bancorp is the holding company of Plaza Bank. Plaza Bank is a full service community bank serving the business and professional communities in Southern California and Southern Nevada. The Bank is committed to meeting the financial needs of small to middle market businesses and professional firms with loans for working capital, equipment and owner-occupied commercial real estate financing and a full array of cash management services. Plaza Bank meets its customers' needs through its eight regional offices located in the cities of El Segundo, Glendale, Irvine, Las Vegas, Manhattan Beach, Montebello, Pasadena and San Diego. For more information, visit www.plazabank.com or call President and CEO Gene Galloway at (949) 502-4309 or (702) 277-2221.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by that Act. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are based on currently available information, expectations, assumptions, projections, and management's judgment about the Company, the Bank, the banking industry and general economic conditions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.
Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that might cause such differences include, but are not limited to: the Bank's ability to successfully execute its business plans and achieve its objectives; changes in general economic, real estate and financial market conditions, either nationally or locally in areas in which the Bank conducts its operations; changes in interest rates; new litigation or claims or changes in existing litigation or claims; future credit loss experience; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Bank's operations or business; loss of key personnel; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; and the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulation on internal control.
Plaza Bank | |||||||||||||
Statements of Financial Condition | |||||||||||||
(Unaudited) | |||||||||||||
September 30, | June 30, | December 31, | September 30, | ||||||||||
ASSETS | 2015 | 2015 | 2014* | 2014* | |||||||||
Cash and cash equivalents | $ | 135,225,000 | $ | 117,342,000 | $ | 106,386,000 | $ | 96,973,000 | |||||
Investment securities - available for sale | 29,149,000 | 34,308,000 | 43,550,000 | 44,346,000 | |||||||||
Loans held for sale | 4,972,000 | 6,861,000 | 36,368,000 | 64,089,000 | |||||||||
Loans held for investment | 829,280,000 | 844,694,000 | 821,722,000 | 765,658,000 | |||||||||
Allowance for possible credit losses | (10,398,000) | (10,156,000) | (9,426,000) | (9,003,000) | |||||||||
Net loans held for investment | 818,882,000 | 834,538,000 | 812,296,000 | 756,655,000 | |||||||||
Goodwill and other intangibles | 12,447,000 | 12,527,000 | 20,609,000 | 20,855,000 | |||||||||
Idemnification asset | 762,000 | 1,466,000 | 1,920,000 | 2,116,000 | |||||||||
Accrued interest and other assets | 29,147,000 | 31,645,000 | 40,142,000 | 43,360,000 | |||||||||
TOTAL ASSETS | $ | 1,030,584,000 | $ | 1,038,687,000 | $ | 1,061,271,000 | $ | 1,028,394,000 | |||||
LIABILITIES AND STOCKHOLDER'S EQUITY | |||||||||||||
Deposits | |||||||||||||
Noninterest-bearing demand | $ | 299,398,000 | $ | 296,380,000 | $ | 311,351,000 | $ | 289,107,000 | |||||
Savings, now and money market accounts | 358,713,000 | 342,565,000 | 332,241,000 | 334,318,000 | |||||||||
Time deposits | 221,863,000 | 231,137,000 | 251,729,000 | 245,617,000 | |||||||||
Total Deposits | $ | 879,974,000 | $ | 870,082,000 | $ | 895,321,000 | $ | 869,042,000 | |||||
Borrowings | 24,000,000 | 34,000,000 | 29,000,000 | 24,000,000 | |||||||||
Accrued interest and other liabilities | 9,552,000 | 10,975,000 | 13,425,000 | 13,427,000 | |||||||||
Total Liabilities | 913,526,000 | 915,057,000 | 937,746,000 | 906,469,000 | |||||||||
Total Shareholder's Equity | 117,058,000 | 123,630,000 | 123,525,000 | 121,925,000 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY | $ | 1,030,584,000 | $ | 1,038,687,000 | $ | 1,061,271,000 | $ | 1,028,394,000 | |||||
Capital Ratios End of Period: | |||||||||||||
Tier 1 leverage ratio | 10.12% | 10.42% | |||||||||||
Tier 1 risk-based capital ratio | 11.56% | 11.66% | |||||||||||
Risk-based capital ratio | 12.80% | 12.84% | |||||||||||
Plaza Bank | |||||||||||||||||
Statements of Operations | |||||||||||||||||
For the Quarter and Year Ended | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Quarter | Quarter | Year-to-Date | Year-to-Date | ||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2015 | 2014* | 2015* | 2014* | ||||||||||||||
Interest Income | 12,466,000 | 11,880,000 | 38,337,000 | 34,143,000 | |||||||||||||
Interest Expense | 1,018,000 | 1,142,000 | 3,091,000 | 3,478,000 | |||||||||||||
Net Interest Income | $ | 11,448,000 | $ | 10,738,000 | $ | 35,246,000 | $ | 30,665,000 | |||||||||
Provisions for Loan Losses | 209,000 | 326,000 | 939,000 | 1,503,000 | |||||||||||||
Net Interest Income after | |||||||||||||||||
Provisions for Loan Losses | 11,239,000 | 10,412,000 | 34,307,000 | 29,162,000 | |||||||||||||
Noninterest Income | 2,078,000 | 6,221,000 | 8,094,000 | 18,425,000 | |||||||||||||
Merger Expense | 105,000 | - | 3,053,000 | - | |||||||||||||
Noninterest Expense | 8,203,000 | 15,415,000 | 32,906,000 | 43,900,000 | |||||||||||||
Income before Income Taxes | 5,009,000 | 1,218,000 | 6,442,000 | 3,687,000 | |||||||||||||
Provisions for Income Taxes | 2,022,000 | 1,012,000 | 3,564,000 | 2,843,000 | |||||||||||||
Net Income | $ | 2,987,000 | $ | 206,000 | $ | 2,878,000 | $ | 844,000 | |||||||||
RETURN ON ASSETS | 1.16 | % | 0.80 | % | 0.37 | % | 0.11 | % | |||||||||
RETURN ON EQUITY | 10.02 | % | 0.71 | % | 3.11 | % | 0.92 | % | |||||||||
Plaza Bank | ||||||||||||||||
Loan Held for Investment Portfolio Composition | ||||||||||||||||
September 30, | June 30, | December 31, | September 30, | |||||||||||||
2015 | 2015 | 2014* | 2014* | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Construction and Land Development | 11,394,000 | 13,570,000 | 10,281,000 | 13,648,000 | ||||||||||||
Commercial real estate and other | 506,150,000 | 504,254,000 | 483,572,000 | 461,153,000 | ||||||||||||
Commercial | 149,310,000 | 166,674,000 | 183,097,000 | 159,318,000 | ||||||||||||
Residential real estate | 112,511,000 | 110,370,000 | 95,359,000 | 83,379,000 | ||||||||||||
Consumer | 53,238,000 | 52,930,000 | 52,001,000 | 50,232,000 | ||||||||||||
Total | $ | 832,603,000 | $ | 847,798,000 | $ | 824,310,000 | $ | 767,730,000 | ||||||||
Allowance for loan losses | (10,398,000 | ) | (10,156,000 | ) | (9,426,000 | ) | (9,003,000 | ) | ||||||||
Deferred loan fees and discounts, net of costs | (3,323,000 | ) | (3,106,000 | ) | (2,588,000 | ) | (2,072,000 | ) | ||||||||
Total net loans | $ | 818,882,000 | $ | 834,536,000 | $ | 812,296,000 | $ | 756,655,000 | ||||||||
Non-Performing Assets | ||||||||||||||||
September 30, | June 30, | December 31, | September 30, | |||||||||||||
2015 | 2015 | 2014* | 2014* | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Non-Accrual Assets | ||||||||||||||||
Loans | $ | 1,716,000 | $ | 1,779,000 | $ | 3,059,000 | $ | 6,732,000 | ||||||||
OREO | - | - | - | - | ||||||||||||
Delinquency | ||||||||||||||||
30 - 89 Days past due | $ | 667,000 | $ | 2,885,000 | $ | 2,504,000 | $ | 426,000 | ||||||||
90 days and greater | 109,000 | 109,000 | 236,000 | 845,000 | ||||||||||||
Plaza Bancorp | |||||||||||||
Statement of Financial Condition | |||||||||||||
For the Quarter and Year Ended | |||||||||||||
(Unaudited) | |||||||||||||
September 30, | June 30, | December 31, | September 30, | ||||||||||
ASSETS | 2015 | 2015 | 2014* | 2014* | |||||||||
Cash and cash equivalents | $ | 135,225,000 | $ | 117,342,000 | $ | 107,987,000 | $ | 96,973,000 | |||||
Investment securities - available for sale | 29,149,000 | 34,308,000 | 43,551,000 | 44,346,000 | |||||||||
Loans held for sale | 4,972,000 | 6,861,000 | 36,369,000 | 64,089,000 | |||||||||
Loans held for investment | 829,280,000 | 844,694,000 | 822,118,000 | 765,658,000 | |||||||||
Allowance for possible credit losses | (10,398,000) | (10,156,000) | (9,426,000) | (9,003,000) | |||||||||
Net loans held for investment | 818,882,000 | 834,538,000 | 812,692,000 | 756,655,000 | |||||||||
Goodwill and other intangibles | 12,447,000 | 12,527,000 | 20,547,000 | 20,855,000 | |||||||||
Idemnification asset | 762,000 | 1,466,000 | 1,920,000 | 2,116,000 | |||||||||
Accrued interest and other assets | 36,737,000 | 59,208,000 | 36,725,000 | 48,421,000 | |||||||||
TOTAL ASSETS | $ | 1,038,174,000 | $ | 1,066,250,000 | $ | 1,059,791,000 | $ | 1,033,455,000 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
Deposits | |||||||||||||
Noninterest-bearing demand | $ | 295,096,000 | $ | 292,231,000 | $ | 306,700,000 | $ | 287,615,000 | |||||
Savings, now and money market accounts | 357,899,000 | 341,752,000 | 336,630,000 | 334,318,000 | |||||||||
Time deposits | 221,863,000 | 231,137,000 | 251,729,000 | 245,617,000 | |||||||||
Total Deposits | $ | 874,858,000 | $ | 865,120,000 | $ | 895,059,000 | $ | 867,550,000 | |||||
Borrowings | 49,000,000 | 58,700,000 | 29,000,000 | 24,000,000 | |||||||||
Accrued interest and other liabilities | 10,125,000 | 42,678,000 | 13,797,000 | 13,720,000 | |||||||||
Total Liabilities | 933,983,000 | 966,498,000 | 937,856,000 | 905,270,000 | |||||||||
Total Shareholders' Equity | 104,191,000 | 99,752,000 | 121,935,000 | 128,185,000 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,038,174,000 | $ | 1,066,250,000 | $ | 1,059,791,000 | $ | 1,033,455,000 | |||||
BASIC BOOK VALUE PER SHARE | $ | 3.47 | $ | 3.32 | $ | 4.13 | $ | 4.34 | |||||
TANGIBLE BOOK VALUE PER SHARE | $ | 3.13 | $ | 2.97 | $ | 3.67 | $ | 3.87 | |||||
BASIC SHARES OUTSTANDING AT PERIOD END | 30,040,003 | 30,040,003 | 29,509,737 | 29,509,737 | |||||||||
DILUTED SHARES OUTSTANDING AT PERIOD END | 30,136,696 | 30,136,696 | 30,368,310 | 30,368,310 | |||||||||
Capital Ratios End of Period: | |||||||||||||
Tier 1 leverage ratio | 8.27% | 7.51% | |||||||||||
Tier 1 risk-based capital ratio | 9.44% | 8.30% | |||||||||||
Risk-based capital ratio | 13.46% | 12.06% | |||||||||||
Plaza Bancorp | |||||||||||||||||
Statement of Operations | |||||||||||||||||
For the Quarter and Year Ended | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Quarter | Quarter | Year-to-Date | Year-to-Date | ||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2015 | 2014* | 2015* | 2014* | ||||||||||||||
Interest income | 12,466,000 | 11,880,000 | 38,349,000 | 34,143,000 | |||||||||||||
Interest expense | 1,463,000 | 1,142,000 | 3,561,000 | 3,496,000 | |||||||||||||
Net Interest Income | $ | 11,003,000 | $ | 10,738,000 | $ | 34,788,000 | $ | 30,647,000 | |||||||||
Provisions for loan losses | 209,000 | 326,000 | 939,000 | 1,503,000 | |||||||||||||
Net interest income after | |||||||||||||||||
Provisions for Loan Losses | 10,794,000 | 10,412,000 | 33,849,000 | 29,144,000 | |||||||||||||
Noninterest income | 2,409,000 | 6,303,000 | 9,023,000 | 18,529,000 | |||||||||||||
Merger expense | 577,000 | - | 4,916,000 | - | |||||||||||||
Noninterest expense | 8,855,000 | 15,614,000 | 34,050,000 | 44,367,000 | |||||||||||||
Income before income taxes | 3,771,000 | 1,101,000 | 3,906,000 | 3,306,000 | |||||||||||||
Provisions for income taxes | 1,635,000 | 996,000 | 2,639,000 | 2,860,000 | |||||||||||||
Net Income | $ | 2,136,000 | $ | 105,000 | $ | 1,267,000 | $ | 446,000 | |||||||||
EARNINGS PER SHARE - BASIC | $ | 0.07 | $ | 0.00 | $ | 0.04 | $ | 0.02 | |||||||||
EARNINGS PER SHARE - DILUTED | $ | 0.07 | $ | 0.00 | $ | 0.04 | $ | 0.01 | |||||||||
BASIC WEIGHTED AVERAGE SHARES | 30,040,003 | 29,511,231 | 30,040,003 | 29,511,231 | |||||||||||||
DILUTED WEIGHTED AVERAGE SHARES | 30,136,696 | 30,368,310 | 30,136,696 | 30,368,310 | |||||||||||||
RETURN ON ASSETS | 0.82 | % | 0.04 | % | 0.16 | % | 0.06 | % | |||||||||
RETURN ON EQUITY | 8.30 | % | 0.33 | % | 1.52 | % | 0.46 | % | |||||||||
*Pooling of Interest | |||||||||||||||||