STOCKTON, Calif., July 19 /PRNewswire-FirstCall/ -- Steven A. Rosso, President and C.E.O. of Pacific State Bancorp , the parent company of Pacific State Bank, today reported 2nd quarter profits and continued asset growth for the Stockton, California based financial institution:
-- Net income for the second quarter of 2007 of $1,409,000
-- Net Income Year to Date 2007 of $2,735,000
-- Total Assets as of June 30, 2007 of $406,339,000.
PSBC quarter over quarter June 30, 2007 compared to June 30, 2006 financial performance information is as follows:
Balance Sheet:
-- Total Federal Funds, Interest Bearing Deposits in Banks and Investment
Securities: $68,426,000, an increase of $45,097,000 or 193.3%.
-- Net Loans: $296,138,000, an increase of $26,031,000 or 9.64%.
-- Total Assets: $406,339,000, an increase of $78,437,000 or 23.92%.
-- Non-Interest Bearing Deposits: $63,077,000, a decrease of $1,050,000 or
1.64%.
-- Total Deposits: $352,857,000, an increase of $65,547,000 or 22.81%.
-- Total Shareholders Equity: $32,073,000, an increase of $7,495,000 or
30.49%.
Income Statement:
-- Total Interest Income: $8,132,000, an increase of $1,811,000 or 28.65%.
-- Total Interest Expense: $3,479,000, an increase of $1,357,000 or
63.95%.
-- Net Interest Income: $4,653,000, an increase of $454,000 or 10.81%.
-- Non-Interest Income: $707,000, an increase of $207,000 or 41.40%.
-- Non-Interest Expense: $3,002,000, an increase of $550,000 or 22.71%.
As of June 30, 2007 the Company had 86 full-time employees as compared
to 76 as of June 30, 2006.
-- Net Income: $1,409,000, an increase of $102,000 or 7.80%.
-- Net Interest Margin: 5.19%, down 55 basis points. The decrease is due
primarily to increases in the rates paid on deposits and other
borrowings and the change in mix of deposits with more time deposits
offset by the increases in the overall yields on earning assets and the
change in mix of earning assets with more loans and Federal funds sold.
-- Annualized Return on Average Assets: 1.43% down from 1.65%.
-- Annualized Return on Average Equity: 18.33% down from 22.60%. The
decrease in ROE is primarily attributable to an increase in
shareholders equity from net income, the proceeds from the sale of
common stock to a new member of the Board of Directors and the exercise
of options. The increase in equity totaled $7,495,000 or 30.49%.
-- Efficiency Ratio: 55.81% increasing slightly from 52.18%.
-- Basic Earnings Per Share: $0.38, an increase of $0.01 per share or
2.70%.
-- Diluted Earnings Per Share: $0.37, an increase of $0.03 per share or
8.82%.
Balance Sheet: June 30, 2007 as compared to December 31, 2006
-- Total Fed Funds and Investment Securities: $68,426,000, an increase of
$13,689,000 or 25.01%.
-- Net Loans: $296,138,000, an increase of $8,820,000 or 3.07%.
-- Total Assets: $406,339,000, an increase of $19,587,000 or 5.06%.
-- Non-Interest Bearing Deposits: $63,077,000 a decrease of $10,120,000 or
13.83%.
-- Total Deposits: $352,857,000, an increase of $11,861,000 or 3.48%.
-- Total Shareholders Equity: $32,073,000, an increase of $3,014,000 or
10.37%.
Income Statement:
-- Total Interest Income: $15,638,000, an increase of $3,525,000 or
29.10%.
-- Total Interest Expense: $6,654,000, an increase of $2,813,000 or
73.26%.
-- Net Interest Income: $8,984,000, an increase of $712,000 or 8.61%.
-- Non-Interest Income: $1,392,000, an increase of $293,000 or 26.66%.
-- Non-Interest Expense: $5,701,000, an increase of $662,000 or 13.14%.
As of June 30, 2007 and December 31, 2006 the Company had 86 full-time
employees.
-- Net Income: $2,735,000, an increase of $221,000 or 8.79%.
-- Net Interest Margin: 5.14%, down 71 basis points. The decrease is due
primarily to increases in the rates paid on deposits and other
borrowings and the change in mix of deposits with more time deposits
offset by the increases in the overall yields on earning assets and the
change in mix of earning assets with more loans and Federal funds sold.
-- Annualized Return on Average Assets: 1.42% down from 1.62%.
-- Annualized Return on Average Equity: 18.29% down from 22.64%. The
decrease in ROE is primarily attributable to an increase in
shareholders equity from net income, the proceeds from the sale of
common stock to a new member of the Board of Directors and the exercise
of options. The increase in equity totaled $3,014,000 or 10.37%.
-- Efficiency Ratio: 54.94% increasing slightly from 53.77%.
-- Basic Earnings Per Share: $0.75, an increase of $0.03 per share or
4.17%.
-- Diluted Earnings Per Share: $0.70, an increase of $0.05 per share or
7.69%.
Balance Sheet: June 30, 2007 as compared to March 31, 2007
-- Total Fed Funds and Investment Securities: $68,426,000, a decrease of
$6,533,000 or 8.72%.
-- Net Loans: $296,138,000, an increase of $8,664,000 or 3.01%.
-- Total Assets: $406,339,000, an increase of $2,144,000 or 0.53%.
-- Non-Interest Bearing Deposits: $63,077,000 a decrease of $3,482,000 or
5.23%.
-- Total Deposits: $352,857,000, a decrease of $3,204,000 or 0.90%.
-- Total Borrowings: $8,500,000, an increase of $3,600,000 or 73.47%
-- Total Shareholders Equity: $32,073,000, an increase of $1,607,000 or
5.27%.
Income Statement: For the quarter ended June 30, 2007 compared to the quarter ended March 31, 2007
-- Total Interest Income: $8,132,000, an increase of $626,000 or 8.34%.
-- Total Interest Expense: $3,479,000, an increase of $304,000 or 9.61%.
-- Net Interest Income: $4,653,000, an increase of $322,000 or 7.43%.
-- Non-Interest Income: $706,000, an increase of $20,000 or 2.92%.
-- Non-Interest Expense: $2,991,000, an increase of $281,000 or 10.37%.
At June 30, and March 31, 2007 the Company had 86 full-time employees.
-- Net Income: $1,409,000, an increase of $83,000 or 6.26%.
-- Net Interest Margin: 5.19%, up 9 basis points. The increase is due to
the increase in the loan fees recognized in the second quarter. Loan
fees for the second quarter of 2007 were $809,000 up $387,000 or
91.71%.
-- Annualized Return on Average Assets: 1.43% up slightly from 1.41%.
-- Annualized Return on Average Equity: 18.33% up slightly from 18.25%.
-- Efficiency Ratio: 55.81% increasing slightly from 53.80%.
-- Basic Earnings Per Share: $0.38, an increase of $0.02 per share or
5.56%.
-- Diluted Earnings Per Share: $0.35, an increase of $0.02 per share or
6.06%.
Pacific State Bancorp Construction Loan Portfolio Review
Due to the concerns for the Central Valley of California single family real estate market and the high ratios of delinquencies and foreclosures in this market; the management of Pacific State Bank felt that the inclusion of the following analysis of our total speculative real estate loan portfolio would be of interest to our investors.
In reviewing the Bank's spec construction loan portfolio for single family dwellings (SFD) at June 30, 2007, it was determined that Pacific State Bank has 29 homes under construction or completed in projects from Oroville to Fresno, California. The total loan commitment for these loans is $9,806,000 with an average loan of $338,138. The total appraised value or adjusted sales price on these homes is $13,695,750 providing equity of $3,889,750. The aggregate loan to value ratio for the spec construction SFD portfolio is 72%. Ten of these spec construction homes are one or two unit in fill SFD's representing 34% of the portfolio. For all loans, the bank has worked with the developers or builders in the past. New spec units are not financed unless all inventories in the development project have been sold. In all of the projects; sales are either pending closure, or have already closed. The one apartment complex, located in Tracy, California, (32 units) is approximately 95% complete and we expect the occupancy permits to be issued shortly.
Development loans with a total of 668 single family lots in the Bank's portfolio are either fully finished or permitted legal lots with total outstanding debt or loan commitments of $12,467,612. The average loan per lot is $18,664. The total appraised value of the 668 lots is $32,767,518 providing a LTV of 38%. In each development, the Bank has received pay downs from project sales or debtor cash reductions. These projects are located in Oroville, Stockton, Galt, Murphys, and Fresno, California. Only 13 finished lots are in Stockton, California. The Bank also has a land loan in Tracy, California, comprising 38 acres that was purchased for $3,807,000 and has an outstanding loan balance of $2,285,000. The loan to value is 54% based on an appraised value of $4,200,000. The borrower is working the parcel through the permitting process.
The Bank also has several commercial projects that are spec industrial, commercial retail/office or flex-office warehouse developments. These projects are in various stages of completion or in position to be placed into permanent financing either with the Bank or with loans the Bank will sell into the secondary market. PSB currently has $40,000,000 in loan commitment for these projects. The markets for these projects are very strong with 0-1% current vacancy rates for Stockton and Lathrop industrial warehousing. Other projects include mini-storage, office, flex-warehousing and retail space.
As of June 30, 2007 the Bank has total gross loans and commitments for spec construction (all spec classifications) of approximately $60,000,000 which represents approximately 14.2% of the gross loans and commitments. The Bank has $423,951,000 in outstanding loans and loan commitments as of June 30, 2007.
Credit Quality Evaluation
At June 30, 2007, credit quality continues to be strong. The Company had one impaired loan in the amount of $121,000. This represents 0.004% of the Company's loan portfolio. This loan has since become current. As of June 30, 2007, loans past due 30 to 59 days totaled $165,000 or 0.006% of the Company's loan portfolio. Loans past due 60 to 89 days totaled $3,000 or 0.0001% of the loan portfolio. The bank continues to have no other real estate owned.
Attached are certain unaudited financial statements supporting the financial information summarized above. Further inquiries should be directed to Mr. Steven Rosso at 209-870-3214, or by mail to P.O. Box 1649, Stockton, California 95201. Additional information also can be obtained by visiting the Company website -- http://www.pacificstatebank.com/.
PACIFIC STATE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share amounts) June December
30, 31,
Assets 2007 2006
Cash and due from banks $14,257 $18,985
Federal funds sold 31,164 31,630
Investment securities - available for sale
(amortized cost of $38,216 in 2007 and $23,186
in 2006) 37,262 23,107
Loans, less allowance for loan losses of $2,699 in
2007 and $2,478 in 2006 296,138 287,318
Premises and equipment, net 13,020 11,957
Company owned life insurance 6,198 6,079
Accrued interest receivable and other assets 8,300 7,676
Total assets $406,339 $386,752
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $63,077 $73,197
Interest bearing 289,780 267,799
Total deposits 352,857 340,996
Other borrowings 8,500 4,900
Subordinated debentures 8,764 8,764
Accrued interest payable and other liabilities 4,145 3,033
Total liabilities 374,266 357,693
Shareholders' equity:
Preferred stock - no par value; 2,000,000 shares
authorized; None issued or outstanding
Common stock - no par value; 24,000,000 shares
authorized; issued and outstanding 3,696,157 in
2007 and 3,661,477 in 2006 9,961 9,651
Retained earnings 22,190 19,455
Accumulated other comprehensive loss, net of tax (77) (47)
Total shareholders' equity 32,073 29,059
Total liabilities and shareholders'
equity $406,339 $386,752
PACIFIC STATE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share amounts) June 30, June 30,
Assets 2007 2006
Cash and due from banks $14,257 $13,702
Federal funds sold 31,164 0
Investment securities - available for sale
(amortized cost of $38,216 in 2007 and $23,546
in 2006) 37,262 23,329
Loans, less allowance for loan losses of $2,699 in
2007 and $2,516 in 2006 296,138 270,107
Premises and equipment, net 13,020 9,564
Company owned life insurance 6,198 4,499
Accrued interest receivable and other assets 8,300 6,701
Total assets $406,339 $327,902
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $63,077 $64,127
Interest bearing 289,780 223,183
Total deposits 352,857 287,310
Other borrowings 8,500 4,900
Subordinated debentures 8,764 8,764
Accrued interest payable and other liabilities 4,145 2,350
Total liabilities 374,266 303,324
Shareholders' equity:
Preferred stock - no par value; 2,000,000 shares
authorized; none issued or outstanding
Common stock - no par value; 24,000,000 shares
authorized; issued and outstanding 3,696,157
in 2007 and 3,589,458 in 2006 9,961 8,280
Retained earnings 22,190 16,426
Accumulated other comprehensive loss, net of tax (77) (128)
Total shareholders' equity 32,073 24,578
Total liabilities and shareholders'
equity $406,339 $327,902
PACIFIC STATE BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
June 30 June 30
(Unaudited) Three months ended Six months ended
(in thousands, except share 2007 2006 2007 2006
amounts)
Interest income:
Interest and fees on loans $7,300 $5,998 $14,142 $11,459
Interest on Federal funds
sold 348 6 669 17
Interest on investment
securities 484 317 827 637
Total interest
income 8,132 6,321 15,638 12,113
Interest expense:
Interest on deposits 3,239 1,792 6,156 3,276
Interest on subordinated
debentures 185 180 377 344
Interest on borrowings 55 150 121 221
Total interest
expense 3,479 2,122 6,654 3,841
Net interest
income before
provision for
loan losses 4,653 4,199 8,984 8,272
Provision for loan losses 55 90 220 180
Net interest income after
provision for loan losses 4,598 4,109 8,764 8,092
Non-interest income:
Service charges 217 250 438 458
Other fee income 470 230 926 461
Gain onsale of loans 20 20 28 180
Total non-interest
income 707 500 1,392 1,099
Non-interest expenses:
Salaries and employee
benefits 1,506 1,335 2,988 2,685
Occupancy 277 208 563 407
Furniture and equipment 200 183 367 361
Other 1,019 726 1,783 1,586
Total non-
interest
expenses 3,002 2,452 5,701 5,039
Income before
provision for
income taxes 2,313 2,157 4,455 4,152
Provision for income taxes 904 850 1,720 1,638
Net income $1,409 $1,307 $2,735 $2,514
Basic earnings per share $0.38 $0.37 $0.75 $0.72
Diluted earnings per share $0.37 $0.34 $0.70 $0.65
Weighted average common
shares outstanding 3,677,935 3,510,801 3,665,558 3,493,964
Weighted average common
and common equivalent
shares outstanding 3,808,108 3,900,010 3,909,302 3,894,748
Three Months Ended Three Months Ended
June 30, 2007 June 30, 2006
Interest Average Interest Average
Income Income
Average or Yield Average or Yield or
Assets: Balance Expense or Cost Balance Expense Cost
Interest-earning
assets:
Loans 295,030 7,300 9.92% 265,333 5,998 9.07%
Investment securities 37,310 484 5.20% 27,095 317 4.69%
Federal funds sold 27,424 348 5.09% 861 6 2.80%
Total average
earning assets 359,764 8,132 9.07% 293,289 6,321 8.64%
Non-earning assets:
Cash and due from
banks 16,644 13,498
Other assets 20,143 11,215
Total average
assets 396,551 318,002
Liabilities and Shareholders'
Equity:
Interest-bearing
liabilities:
Deposits
Interest-bearing
demand 84,522 622 2.95% 89,412 573 2.57%
Savings 5,343 13 0.98% 6,298 15 0.96%
Time deposits 196,233 2,604 5.32% 116,062 1,204 4.16%
Other borrowings 13,564 240 7.10% 19,592 330 6.76%
Total average
interest-bearing
liabilities 299,661 3,479 4.66% 231,364 2,122 3.68%
Noninterest-bearing
liabilities:
Demand deposits 63,893 62,558
Other liabilities 2,157 881
Total liabilities 365,711 294,803
Shareholders' Equity: 30,839 23,199
Total average
liabilities and
shareholders' equity 396,551 318,002
Net interest income 4,653 4,199
Yield on interest-
earning assets 9.07% 8.64%
Cost of funding interest-
earning assets 3.88% 2.90%
Net interest margin 5.19% 5.74%
Six Months Ended Six Months Ended
June 30, 2007 June 30, 2006
Interest Average Interest Average
Income Yield Income Yield
Average or or Average or or
Assets: Balance Expense Cost Balance Expense Cost
Interest-earning assets:
Loans 293,728 14,142 9.71% 257,036 11,459 8.99%
Investment securities 31,945 821 5.18% 27,408 637 4.69%
Federal funds sold 26,393 669 5.11% 845 17 4.06%
Interest bearing deposits
in banks 215 6 5.63% 0 0 0.00%
Total average earning
assets 352,281 15,638 8.95% 285,289 12,113 8.56%
Non-earning assets:
Cash and due from banks 16,316 12,896
Other assets 21,007 14,431
Total average assets 389,604 312,616
Liabilities and Shareholders'
Equity:
Interest-bearing
liabilities:
Deposits
Interest-bearing demand 86,181 1,230 2.88% 95,679 1,182 2.49%
Savings 5,468 27 1.00% 6,415 25 0.79%
Time deposits 187,687 4,899 5.26% 106,785 2,069 3.91%
Other borrowings 13,677 498 7.34% 18,169 565 6.27%
Total average
interest-
bearing liabilities 291,013 6,654 4.58% 227,048 3,841 3.41%
Noninterest-bearing
liabilities:
Demand deposits 64,609 61,686
Other liabilities 1,826 1,486
Total liabilities 359,448 290,220
Shareholders' Equity: 30,156 22,396
Total average liabilities
and shareholders' equity 389,604 312,616
Net interest income 8,984 8,272
Yield on interest-earning
assets 8.95% 8.56%
Cost of funding interest-
earning assets 3.81% 2.72%
Net interest margin 5.14% 5.85%
