IRVINE, CA -- (Marketwired) -- 10/19/16 -- Plaza Bancorp (OTCBB: PLZZ)
Third quarter 2016 highlights - compared to prior quarter
- 51% annualized growth in deposits
- Assets up 29% annualized to $1.2 billion
- Loans held for investment increased $41 million
- Net interest margin improved to 4.77%
Plaza Bancorp (OTCBB: PLZZ) (the "Company"), the holding company of Plaza Bank (the "Bank"), reported unaudited net income for the quarter ended September 30, 2016 of $2.8 million, or $0.09 per share on a diluted basis compared with $3.0 million, or $0.10 per diluted share for the second quarter of 2016. For the quarter ended September 30, 2016, the Company's annualized return on average assets was 1.00% and annualized return on average equity was 9.79%, down from an annualized return on average assets of 1.09% and an annualized return on average equity of 10.58% for the second quarter of 2016.
For the first nine months of 2016, the Company recorded net income of $8.1 million, or $0.27 per diluted share. For the same period in 2015, the Company recorded net income of $931,000, or $0.03, per diluted share. For the three quarters ended September 30, 2016, the Company's annualized return on average assets was 1.00% and annualized return on average equity was 9.64%, up from an annualized return on average assets of 0.18% and an annualized return on average equity of 3.19% for the same period in 2015. The Company's results for the first nine months of 2015 included $4.9 million in merger related expenses.
Gene Galloway, President and Chief Executive Officer of the Company and the Bank, commented on the third quarter results, stating "We are very pleased with the strong performance by our Bank's personnel to increase our total assets by $82 million or 7% during the quarter to $1.2 billion. The balance sheet growth was driven by the successful implementation of our plan to grow the three major deposit categories, non-interest checking, money market and certificates of deposit. These categories, during the third quarter, grew by $25 million, $81 million and $8 million, respectively, increasing our total deposits by $114 million or 13% over the second quarter of 2016."
Mr. Galloway concluded with, "Our loan production continued to be robust as our loan originations were $113 million in the third quarter. Additionally, our loan pipeline is strong and we expect to close out the year with another stellar loan production quarter."
Other highlights for quarter ended September 30, 2016 included:
- Loans held for investment grew $40.8 million, or 17.1% annualized, to $997.1 million during the third quarter compared to loan growth of $37.8 million, or 16.5% annualized, for the second quarter of 2016
- Loan originations by the Bank in the third quarter totaled $113.2 million, an increase of $29.3 million compared to the originations for the second quarter of 2016. Loan originations year-to-date total $283.7 million
- Net interest income increased $892,000, or 7.4%, to $13.0 million for the third quarter of 2016 compared to $12.1 million for the second quarter of 2016
- The Company's net interest margin ("NIM") increased in the third quarter to 4.77% compared to the prior linked quarter's NIM of 4.68%. The NIM for the first nine months of 2016 was 4.72%
- The Company's loans held for investment to deposits ratio decreased from 105.9% as of June 30, 2016 to 98.0% as of September 30, 2016
- Total revenues increased $280,000, or 1.7%, to $16.5 million for the third quarter of 2016 compared to $16.2 million for the second quarter of 2016
- During the quarter, the Company realized a gain of $625,000 on the sale of $9.1 million of SBA 7(a) loans compared to a gain $1.2 million on the sale of $17.5 million of SBA 7(a) loans in the second quarter of 2016
- Nonperforming assets totaled $2.0 million, or 0.17% of total assets at September 30, 2016 compared to $1.2 million, or 0.11% at June 30, 2016
- The ratio of allowance for loan losses to total loans held for investment was 1.29% at September 30, 2016. Including the credit discount on acquired loans of $1.8 million in the ratio, the ratio increases to 1.47%
- The Company's efficiency ratio for the quarter was 63% compared to the 62% for the second quarter in 2016
- Tangible book value per diluted share increased $0.10 to $3.52 during the third quarter
Net interest income for the quarter ended September 30, 2016 totaled $13.0 million. Loan interest income totaled $14.5 million, the average total outstanding loans for the quarter were $981.6 million and the annualized yield was 5.86%. Interest expense related to deposits was $1.2 million for the quarter, or 49 basis points annualized. The interest expense related to the subordinated debentures for the quarter was $453,000, or 7.245% annualized.
The Company recorded a $494,000 provision for loan losses during the third quarter of 2016 principally as a result of the $40.8 million loan growth. For the third quarter, total charge-offs were $74,000 and recoveries were $25,000. Non-accrual loans net of discounts totaled $1.8 million at September 30, 2016 of which $652,000 is covered under a FDIC share-loss agreement or SBA guaranty.
Non-interest income for the third quarter of 2016 was $1.8 million. Non-interest income for the third quarter is primarily comprised of a net gain from the sale of loans of $625,000, loan servicing income of $333,000, deposit fee income of $299,000, loan referral fee income of $92,000 and other fee income totaling $457,000.
Non-interest expense totaled $9.5 million for the third quarter of 2016. Compensation and benefits comprises approximately 65%, or $6.2 million, of the total non-interest expense. The Company had 161 full-time equivalent employees as of September 30, 2016.
For the third quarter of 2016, the Company's effective tax rate was 40.8% for a total tax expense of $1.9 million for the quarter.
At September 30, 2016, the Company had a tier 1 leverage capital ratio of 9.25%, common equity tier 1 capital ratio of 9.87%, tier 1 capital ratio of 9.87% and total capital ratio of 13.51%. At September 30, 2016, the Bank exceeded all regulatory capital requirements with a tier 1 leverage capital ratio of 10.86%, common equity tier 1 capital ratio of 11.57%, tier 1 capital ratio of 11.57% and total capital ratio of 12.82%. 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 capital, 8.00% for tier 1 capital and 10.00% for total capital.
Plaza Bancorp 9/30/2016 6/30/2016 12/31/2015
---------- ---------- ----------
Tier 1 leverage ratio 9.25% 9.12% 8.56%
Tier 1 capital ratio 9.87% 9.76% 9.35%
Common equity tier 1 capital ratio 9.87% 9.76% 9.35%
Total capital ratio 13.51% 13.49% 13.24%
Plaza Bank
Tier 1 leverage ratio 10.86% 10.97% 10.48%
Tier 1 capital ratio 11.57% 11.74% 11.44%
Common equity tier 1 capital ratio 11.57% 11.74% 11.44%
Total capital ratio 12.82% 12.99% 12.70%
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 Bancorp
Consolidated Condensed Statements of Financial Condition
(Unaudited)
(dollars in thousands) September 30, June 30, December 31, September 30,
ASSETS 2016 2016 2015 2015
------------- ----------- ------------ -------------
Cash and cash
equivalents $ 138,085 $ 92,203 $ 97,576 $ 135,225
Investment securities -
available for sale 25,570 28,467 28,215 29,149
Loans held for sale 3,338 2,720 4,535 4,972
Loans held for
investment 997,051 956,229 882,199 829,280
Allowance for loan
losses (12,856) (12,411) (11,506) (10,398)
------------- ----------- ------------ -------------
Net loans held for
investment 984,195 943,818 870,693 818,882
Goodwill and other
intangibles 9,134 9,298 9,692 9,895
Mortgage servicing
rights 2,929 2,968 2,719 2,552
Indemnification asset 420 519 762 762
Accrued interest and
other assets 32,108 34,020 36,540 36,737
------------- ----------- ------------ -------------
TOTAL ASSETS $ 1,195,779 $ 1,114,013 $ 1,050,732 $ 1,038,174
============= =========== ============ =============
LIABILITIES AND EQUITY
Deposits
Noninterest-bearing
demand $ 295,371 $ 270,000 $ 316,516 $ 295,096
Savings, now and
money market
accounts 477,265 396,277 355,515 357,899
Time deposits 244,407 236,617 211,998 221,863
------------- ----------- ------------ -------------
Total Deposits 1,017,043 902,894 884,029 874,858
Borrowings 54,720 89,712 48,696 49,000
Accrued interest and
other liabilities 8,309 8,622 10,738 10,125
------------- ----------- ------------ -------------
Total Liabilities 1,080,072 1,001,228 943,463 933,983
Total stockholder's
equity 115,707 112,785 107,269 104,191
------------- ----------- ------------ -------------
TOTAL LIABILITIES AND
EQUITY $ 1,195,779 $ 1,114,013 $ 1,050,732 $ 1,038,174
============= =========== ============ =============
BASIC BOOK VALUE PER
SHARE $ 3.85 $ 3.75 $ 3.57 $ 3.47
BASIC BOOK VALUE PER
DILUTED SHARE $ 3.83 $ 3.73 $ 3.54 $ 3.42
TANGIBLE BOOK VALUE PER
SHARE $ 3.55 $ 3.45 $ 3.25 $ 3.13
TANGIBLE BOOK VALUE PER
DILUTED SHARE $ 3.52 $ 3.42 $ 3.22 $ 3.09
BASIC SHARES
OUTSTANDING 30,039,244 30,039,244 30,034,244 30,040,003
DILUTED SHARES
OUTSTANDING 30,244,080 30,228,651 30,296,867 30,473,026
Capital Ratios:
Tier 1 leverage
ratio 9.25% 9.12% 8.56% 8.27%
Tier 1 risk-based
capital ratio 9.87% 9.76% 9.35% 9.55%
Common equity
tier 1 capital
ratio 9.87% 9.76% 9.35% 9.55%
Risk-based
capital ratio 13.51% 13.49% 13.24% 13.61%
Plaza Bancorp
Consolidated Condensed Statements of Operations
(Unaudited)
Quarter-to- Quarter-to- Quarter-to- Year-to- Year-to-
Date Date Date Date Date
September June September September September
30, 30, 30, 30, 30,
2016 2016 2015 2016 2015 *
----------- ----------- ----------- ----------- -----------
(dollars in
thousands)
Interest income $ 14,684 $ 13,685 $ 12,464 $ 41,553 $ 38,349
Interest expense 1,705 1,598 1,462 4,792 3,561
----------- ----------- ----------- ----------- -----------
Net Interest
Income 12,979 12,087 11,002 36,761 34,788
Provision for
loan losses 494 310 209 1,391 939
----------- ----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses 12,485 11,777 10,793 35,370 33,849
Noninterest
income 1,806 2,525 2,407 6,616 6,835
Noninterest
expense 9,549 9,304 9,428 28,567 33,080
----------- ----------- ----------- ----------- -----------
Income before
income taxes 4,742 4,998 3,772 13,419 7,604
Provision for
income taxes 1,933 2,043 1,636 5,332 2,639
----------- ----------- ----------- ----------- -----------
Income from
continuing
operations 2,809 2,955 2,136 8,087 4,965
Loss on
discontinued
operations - - (32) - (3,698)
----------- ----------- ----------- ----------- -----------
Net income
before
noncontrolling
interest in
Plaza Bank 2,809 2,955 2,104 8,087 1,267
Less: Net income
attributed to
noncontrolling
interest in
Plaza Bank - - - - (336)
----------- ----------- ----------- ----------- -----------
Net income $ 2,809 $ 2,955 $ 2,104 $ 8,087 $ 931
=========== =========== =========== =========== ===========
EARNINGS PER
SHARE - BASIC $ 0.09 $ 0.10 $ 0.07 $ 0.27 $ 0.03
EARNINGS PER
SHARE - DILUTED$ 0.09 $ 0.10 $ 0.07 $ 0.27 $ 0.03
BASIC WEIGHTED
AVERAGE SHARES 30,039,244 30,038,145 29,587,799 30,037,218 29,597,394
DILUTED WEIGHTED
AVERAGE SHARES 30,238,438 30,237,144 30,110,273 30,239,430 30,109,679
RETURN ON
AVERAGE ASSETS 1.00% 1.09% 0.81% 1.00% 0.18%
RETURN ON
AVERAGE EQUITY 9.79% 10.58% 8.18% 9.64% 3.19%
*Pooling of Interest with Manhattan Bancorp effected in June 2015
Plaza Bancorp
Loans Held for Investment Portfolio Composition
(Unaudited)
September 30, June 30, December 31, September 30,
2016 2016 2015 2015
------------- --------- ------------ -------------
(dollars in thousands)
Construction and land
development $ 11,502 $ 15,259 $ 12,906 $ 11,394
Commercial real estate
and other 606,680 569,246 522,739 506,150
Commercial 182,366 174,547 162,485 149,310
Residential real
estate 136,873 138,647 131,051 112,511
Consumer 63,769 62,482 56,656 53,238
------------- --------- ------------ -------------
Total 1,001,190 960,181 885,837 832,603
Deferred loan fees and
discounts, net of
costs (4,139) (3,952) (3,638) (3,323)
------------- --------- ------------ -------------
Loans held for
investment 997,051 956,229 882,199 829,280
Allowance for loan
losses (12,856) (12,411) (11,506) (10,398)
------------- --------- ------------ -------------
Total net loans $ 984,195 $ 943,818 $ 870,693 $ 818,882
============= ========= ============ =============
Non-Performing Assets
September 30, June 30, December 31, September 30,
2016 2016 2015 2015
-------------- ---------- ------------- --------------
(dollars in
thousands)
Non-Accrual Assets
Loans (net of
discounts) $ 1,768 $ 866 $ 1,236 $ 1,716
OREO 206 206 206 206
Delinquent Loans (net
of discounts)
30 - 89 days past due $ 3,461 $ 492 $ 3,487 $ 667
90 days and greater 1,363 435 109 109
Media Contacts:
Gene Galloway
President and Chief Executive Officer
(702) 277-2221 or (949) 502-4309
Email Contact
John Shindler
Executive Vice President and Chief Financial Officer
(949) 225-3704
Email Contact
