Private Bancorp of America, Inc. Announces Continued Strong Net Income and Core Deposit Growth for Third Quarter 2025

Third Quarter 2025 Highlights

• Net income for the third quarter of 2025 was $9.7 million, compared to $10.4 million in the prior quarter and $9.5 million in the third quarter of 2024. Net income increased 2.6% year over year. Results for the third quarter of 2025 reflect the reversal of $1.3 million of interest income and a $1.0 million increase in reserves for loans placed on nonaccrual during the quarter.
• Net income for the third quarter of 2025 represents a return on average assets of 1.51% and a return on average tangible common equity of 15.28%
• Diluted earnings per share for the third quarter of 2025 was $1.65, compared to $1.77 in the prior quarter and $1.63 in the third quarter of 2024
• Core deposits were $2.19 billion as of September 30, 2025, an increase of $121.1 million or 5.8% from June 30, 2025. Year over year, core deposits increased $318.8 million or 17.0% and brokered deposits decreased $153.6 million or 65.7%. Total deposits were $2.27 billion as of September 30, 2025, an increase of $109.5 million or 5.1% from June 30, 2025, which included a reduction in brokered deposits of $11.6 million.
• Total cost of deposits was 2.02% for the third quarter of 2025, a decrease from 2.08% in the prior quarter and 2.62% in the third quarter of 2024, an improvement of 3.0% quarter over quarter and 22.9% year over year. The spot rate for total deposits was 1.91% as of September 30, 2025, compared to 2.04% at June 30, 2025. Total cost of funding sources was 2.08% for the third quarter of 2025, a decrease from 2.14% in the prior quarter and 2.71% in the third quarter of 2024
• Loans held-for-investment (“HFI”) totaled $2.08 billion as of September 30, 2025, an increase of $0.5 million or 0.0% from June 30, 2025. Loans HFI increased 3.4% year over year
• Investment securities available-for-sale (“AFS”) were $199.9 million as of September 30, 2025, an increase of $11.0 million or 5.84% since June 30, 2025, and an increase of $58.8 million or 41.64% year over year, primarily as a result of new securities purchased.
• Net interest margin was 4.65% for the third quarter of 2025, compared to 4.94% in the prior quarter and 4.44% in the third quarter of 2024
• Provision for credit losses for the third quarter of 2025 was $1.8 million, compared to $1.3 million for the prior quarter and $0.3 million for the third quarter of 2024. The allowance for loan losses was 1.38% of loans HFI as of September 30, 2025 compared to 1.35% at June 30, 2025
• As of September 30, 2025, criticized loans totaled $70.5 million, or 3.39% of total loans, up from $58.2 million, or 2.79% of total loans at June 30, 2025
• Tangible book value per share was $44.11 as of September 30, 2025, an increase of $1.91 since June 30, 2025 primarily as a result of strong earnings. Tangible book value per share increased 4.5% quarter-over-quarter and 19.6% year over year.

LA JOLLA, Calif., Oct. 17, 2025 (GLOBE NEWSWIRE) — Private Bancorp of America, Inc. (OTCQX: PBAM), (“Company”) and CalPrivate Bank (“Bank”) announced unaudited financial results for the third fiscal quarter ended September 30, 2025. The Company reported net income of $9.7 million, or $1.65 per diluted share, for the third quarter of 2025, compared to $10.4 million, or $1.77 per diluted share, in the prior quarter, and $9.5 million, or $1.63 per diluted share, in the third quarter of 2024.

Rick Sowers, President and CEO of the Company and the Bank stated, “Management and the Board continue to be focused on the basics – building and expanding quality Relationships in the communities we serve.  This is demonstrated by the improvement in our core deposit franchise and our consistent, strong earnings profile. Although 2025 continues to be a slow year for loan growth due to suppressed demand, what we view as continued unreasonable market pricing, and increased non-bank competition, we are adding new Relationships across our footprint by delivering our Clients customized Solutions that meet their individual needs. Pipelines are strong going into the fourth quarter across our markets, which is encouraging.  We believe that focusing on the fundamentals and having a disciplined approach to lending and balance sheet management have served us well and we are not deviating from that strategy.”  

Sowers added, “We are excited to open our Montecito Branch this quarter and welcoming Clients into our office in the Upper Village.  Led by longtime Santa Barbara banking executive George Leis, we are hitting the ground running and looking forward to gaining market share in this important expansion for CalPrivate Bank.”

The Bank’s superior financial performance and industry leading service metrics continue to be recognized by industry publications and our Clients. This recognition reinforces our strategic thinking and our dedication to excellence, innovation, delivering Client-focused banking solutions and enhancing shareholder value:   

• Top 20 Community Banks in the US for 2025 by American Banker with assets between $2B and $10B in assets and #2 in California
• #1 for both Return on Assets (ROA) and Return on Equity (ROE) among banks with less than $5 billion in assets in 2024
• #1 SBA 504 Community Bank Lender in the United States
• #10 Best U.S. Bank by Bank Director’s RankingBanking^®
• Client Net Promoter Score of 81 (World Class)
• Bauer 5 Star Rating
• 2025 Best 50 OTCQX

“CalPrivate continues to outperform peers and build tangible book value for shareholders at an attractive rate,” said Selwyn Isakow, Chairman of the Board of the Company and the Bank. “While economic and geopolitical uncertainty continue to temper business investment and industry loan demand, management’s disciplined execution of our strategy – to be the finest relationship bank in coastal Southern California – continues to deliver results. Through our Distinctly Different™ service and superior client solutions, core deposit growth from our valued clients remains exceptional, strengthening franchise value and earnings. Our client relationships are defined by the mutual trust we build, the friendships formed, and the shared success that connects us. Behind every committed client relationship is a dedicated team of professionals across operations, compliance, technology, and support, whose quiet excellence and collegial spirit make our service promise possible each day. They are the foundation of our culture and the reason CalPrivate feels so different from any other bank.”

STATEMENT OF INCOME

Net Interest Income

Net interest income for the third quarter of 2025 totaled $29.3 million, a decrease of $0.8 million or 2.6% from the prior quarter and an increase of $3.6 million or 14.1% from the third quarter of 2024. The decrease from the prior quarter was due to a $0.7 million decrease in interest income, including a $1.3 million reversal of interest income for loans placed on nonaccrual during the quarter.

Net Interest Margin

Net interest margin for the third quarter of 2025 was 4.65%, compared to 4.94% for the prior quarter and 4.44% in the third quarter of 2024. The 29 basis point decrease in net interest margin from the prior quarter was primarily due to a lower average yield on loans, which included a 21 basis point decrease in the net interest margin due to a reversal of interest income for loans placed on nonaccrual during the quarter. The yield on interest-earning assets was 6.53% for the third quarter of 2025 compared to 6.89% for the prior quarter, and the cost of interest-bearing liabilities was 2.88% for the third quarter of 2025 compared to 2.95% in the prior quarter. The cost of total deposits was 2.02% for the third quarter of 2025 compared to 2.08% in the prior quarter. The cost of core deposits, which excludes brokered deposits, was 1.93% in the third quarter of 2025 compared to 1.94% in the prior quarter and 2.27% for the third quarter of 2024. The spot rate for total deposits was 1.91% as of September 30, 2025, compared to 2.04% at June 30, 2025.

Provision for Credit Losses

Provision expense for credit losses for the third quarter of 2025 was $1.8 million, compared to $1.3 million in the prior quarter and $0.3 million in the third quarter of 2024. The provision expense for loans HFI for the third quarter of 2025 was $1.7 million, primarily reflecting a $1.0 million increase in reserves for loans placed on nonaccrual during the quarter. In addition, there was a $0.1 million provision for unfunded commitments that was primarily driven by growth in total credit line commitment balances compared to the prior quarter. For more details, please refer to the “Asset Quality” section below.

Noninterest Income

Noninterest income was $2.2 million for the third quarter of 2025, compared to $1.7 million in the prior quarter and $1.4 million in the third quarter of 2024. U.S. Small Business Administration (“SBA”) loan sales for the third quarter of 2025 were $17.3 million with a 9.46% average trade premium resulting in a net gain on sale of $1.0 million, compared with $9.5 million with a 10.01% average trade premium resulting in a net gain on sale of $523 thousand in the prior quarter.

Noninterest Expense

Noninterest expense was $15.9 million for the third quarter of 2025, compared to $15.7 million in the prior quarter and $13.4 million in the third quarter of 2024. The increase in noninterest expense from the prior quarter is primarily due to higher compensation and benefits costs from continued hiring, including continuing to build a team of bankers in Montecito, California. The efficiency ratio was 50.49% for the third quarter of 2025 compared to 49.27% in the prior quarter and 49.46% in the third quarter of 2024. The modest increase in the efficiency ratio from the prior quarter reflects a decline in net interest income, primarily from the $1.3 million reversal of interest on loans placed on nonaccrual during the quarter.

The Company remains committed to making investments in the business, including technology, marketing, and staffing. Inflationary pressures and low unemployment continue to have an impact on rising wages as well as increased costs related to third party service providers, which we proactively monitor and manage.

Provision for Income Tax Expense

Provision for income tax expense was $4.1 million for the third quarter of 2025, compared to $4.4 million for the prior quarter. The effective tax rate for the third quarter of 2025 was 29.7%, compared to 29.7% in the prior quarter and 29.5% in the third quarter of 2024.

STATEMENT OF FINANCIAL CONDITION

As of September 30, 2025, total assets were $2.58 billion, an increase of $121.6 million since June 30, 2025. The increase in assets from the prior quarter was primarily due to higher cash and due from banks, which was driven by the $121.1 million increase in core deposits. Investment securities available-for-sale (“AFS”) were $199.9 million as of September 30, 2025, an increase of $11.0 million or 5.8% since June 30, 2025, primarily as a result of new securities purchased. As of September 30, 2025, the net unrealized loss on the AFS investment securities portfolio, which is comprised mostly of US Treasury and Government Agency debt, was $7.8 million (pre-tax) compared to a loss of $9.0 million (pre-tax) as of June 30, 2025. The average duration of the Bank’s AFS portfolio is 3.5 years. The Company has no held-to-maturity securities. Loans HFI totaled $2.08 billion as of September 30, 2025, an increase of $0.5 million since June 30, 2025, primarily reflecting increases in commercial and industrial (“C&I”) loan balances largely offset by decreases in commercial real estate (“CRE”) loan balances.

Total deposits were $2.27 billion as of September 30, 2025, an increase of $109.5 million since June 30, 2025. During the quarter, core deposits increased by $121.1 million, which was driven by a $68.5 million increase in interest-bearing core deposits (including balances in the IntraFi ICS and CDARS programs) and a $52.6 million increase in noninterest-bearing core deposits. Noninterest-bearing deposits represent 29.8% of total core deposits. Offsetting the increase to total deposits from core deposits, brokered deposits decreased by $11.6 million since June 30, 2025. Uninsured deposits, net of collateralized and fiduciary deposit accounts, represent 51.0% of total deposits as of September 30, 2025.

As of September 30, 2025, total available liquidity was $2.3 billion or 198.6% of uninsured deposits, net of collateralized and fiduciary deposit accounts. Total available liquidity is comprised of $453 million of on-balance sheet liquidity (cash and investment securities) and $1.8 billion of unused borrowing capacity.

Asset Quality and Allowance for Credit Losses (“ACL”)

As of September 30, 2025, the allowance for loan losses was $28.8 million or 1.38% of loans HFI, compared to $28.2 million or 1.35% of loans HFI as of June 30, 2025. The increase in the coverage ratio from June 30, 2025 is due primarily to a $1.0 million increase in reserves for loans placed on nonaccrual during the quarter. Nonperforming assets were 1.79% of total assets as of September 30, 2025 compared to 0.66% as of June 30, 2025. The reserve for unfunded commitments was $1.0 million as of September 30, 2025, compared to $0.9 million as of June 30, 2025. The increase in the reserve for unfunded commitments was due to higher unfunded commitment balances. Given the credit quality of the loan portfolio, management believes we are sufficiently reserved.

At September 30, 2025 and June 30, 2025, classified loans were $61.9 million and $27.8 million, respectively. The September 30, 2025 classified balance consisted of 43 loans: 26 real estate secured loans totaling $39.7 million with $0.2 million of specific reserves and a 60.2% weighted-average LTV; and 17 commercial and industrial loans totaling $22.2 million with $3.0 million of specific reserves. As of September 30, 2025, classified loans included $37.7 million of nonaccrual loans, an increase of $29.9 million from June 30, 2025.  

Capital Ratios ⁽²⁾

The Bank’s capital ratios were in excess of the levels established for “well capitalized” institutions and are as follows:

(2) September 30, 2025 capital ratios are preliminary and subject to change.

About Private Bancorp of America, Inc. (OTCQX: PBAM)

PBAM is the holding company for CalPrivate Bank, which operates offices in Coronado, San Diego, La Jolla, Newport Beach, El Segundo, Beverly Hills, and coming soon, Montecito, as well as through efficient digital banking services. CalPrivate Bank is driven by its core values of building client Relationships based on superior funding Solutions, unparalleled Service, and mutual Trust. The Bank caters to high-net-worth individuals, professionals, closely held businesses, and real estate entrepreneurs, delivering a Distinctly Different™ personalized banking experience while leveraging cutting-edge technology to enhance our clients’ evolving needs. CalPrivate Bank is in the top tier of customer service survey ratings in the nation, scoring almost 3x higher than the median domestic bank. The Bank offers comprehensive deposit and treasury services, rapid and creative loan options including various portfolio and government-guaranteed lending programs,  cross border banking, and innovative, unique technologies that drive enhanced  client performance. CalPrivate Bank has been recognized by Bank Director’s RankingBanking® as the 10^th best bank in the country and the #1 bank in its asset class for both return on assets (ROA) and return on equity (ROE). CalPrivate Bank was also ranked in the top 5% of banks in the U.S. with assets between $2B and $10B by American Banker. Additionally, CalPrivate Bank is a Bauer Financial 5-star rated bank, an SBA Preferred Lender, and has been honored as Community Bank 504 Lender of the Year by the NADCO Community Impact Awards, exemplifying excellence in the banking industry. These prestigious rankings highlight the Bank’s commitment to delivering exceptional banking services and setting new industry standards.

CalPrivate Bank’s website is www.calprivate.bank.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures in addition to results presented in accordance with GAAP, including efficiency ratio, pretax pre-provision net revenue, average tangible common equity and return on average tangible common equity. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s results of operations and financial condition and to enhance investors’ overall understanding of such results of operations and financial condition, to permit investors to effectively analyze financial trends of our business activities, and to enhance comparability with peers across the financial services sector. These non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures prepared in accordance with GAAP and should be read in conjunction with the Company’s GAAP financial information. A reconciliation of the most comparable GAAP financial measures to non-GAAP financial measures is included in the accompanying financial tables.

Investor Relations Contacts

Rick Sowers
President and Chief Executive Officer
Private Bancorp of America, Inc., and CalPrivate Bank
(424) 303-4894

Cory Stewart
Executive Vice President and Chief Financial Officer
Private Bancorp of America, Inc., and CalPrivate Bank
(206) 293-3669

Safe Harbor Paragraph

This communication contains expressions of expectations, both implied and explicit, that are “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. We caution you that a number of important factors could cause actual results to differ materially from those in the forward-looking statements, especially given the current turmoil in the banking and financial markets. These factors include the effects of depositors withdrawing funds unexpectedly, counterparties being unable to provide liquidity sources that we believe should be available, loan losses, economic conditions and competition in the geographic and business areas in which Private Bancorp of America, Inc. operates, including competition in lending and deposit acquisition, the unpredictability of fee income from participation in SBA loan programs, the effects of bank failures, liquidations and mergers in our markets and nationally, our ability to successfully integrate and develop business through the addition of new personnel, whether our efforts to expand loan, product and service offerings will prove profitable, system failures and data security, whether we can effectively secure and implement new technology solutions, inflation, fluctuations in interest rates, legislation and governmental regulation. You should not place undue reliance on forward-looking statements, and we undertake no obligation to update those statements whether as a result of changes in underlying factors, new information, future events or otherwise. These factors could cause actual results to differ materially from what we anticipate or project. You should not place undue reliance on any such forward-looking statement, which speaks only as of the date on which it was made. Although we believe in good faith the assumptions and bases supporting our forward-looking statements to be reasonable, there can be no assurance that those assumptions and bases will prove accurate.

(1) Non-GAAP measure. See GAAP to non-GAAP Reconciliation table.

(1) Non-GAAP measure. See GAAP to non-GAAP Reconciliation table.

PRIVATE BANCORP OF AMERICA, INC.
(Unaudited)

The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: efficiency ratio, pretax pre-provision net revenue, average tangible common equity, and return on average tangible common equity. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures.

PRIVATE BANCORP OF AMERICA, INC.
(Unaudited)

The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: efficiency ratio, adjusted efficiency ratio, pretax pre-provision net revenue, average tangible common equity, adjusted return on average assets, return on average tangible common equity and adjusted return on average tangible common equity. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures.