Private Bancorp of America, Inc. Reports First Quarter 2020 Financial Results

Net income increased 20% to $1.9 million compared to $1.6 million for the same period one year ago
Net interest income increased 20% to $11.5 million compared to $9.6 million for the same period last yearTotal assets increased $120 million, or 11%, for the quarter and $333 million, or 39%, year-over-year. Total loans increased to $894.1 million up 1% for the quarter and up 25% year-over-yearThe Allowance for Loan Losses increased $997 thousand to $9.6 million in response to uncertain economic conditions resulting from COVID-19Total deposits increased to $962.2 million up 13% for the quarter and up 36% year-over-yearNon-interest bearing deposits increased 32% during the quarter and 35% year-over-year.LA JOLLA, Calif., April 30, 2020 (GLOBE NEWSWIRE) — Private Bancorp of America, Inc. (OTCQX:PBAM), (“Company”) and CalPrivate Bank (“Bank”) announced unaudited financial results for the first quarter ending March 31, 2020.  For the first quarter of 2020, the Company reported net income of $1.9 million or $0.34 per diluted share. The COVID-19 pandemic caused widespread disruptions to the economy and communities the Bank serves.  In response, the Bank implemented its business continuity and pandemic plans allowing us to serve and protect our customers, employees and communities.  These included measures to protect client and employee safety, modifying branch hours and locations and moving the majority of the Company’s resources to operating remotely.  In addition, the Bank was fully ready to participate in the Small Business Administrations’ Paycheck Protection Program (“PPP”) on April 3, 2020 and immediately began processing loans for clients with approximately 462 loans approved for $127.8 million through April 24, 2020.  The Bank is also participating in the second phase of the Paycheck Protection Program and began processing applications on April 27, 2020 and has 106 loans approved for $23 million as of April 28, 2020.  The Bank’s loan portfolio as of the end of the quarter has no direct exposure to the oil and gas industry and 5% of the portfolio is in the hospitality and restaurant industries.  The Bank continues to monitor draws on lines of credit and has not experienced significant unusual activity.  The Bank maintains a very strong on balance sheet liquidity position with a liquidity ratio at 26% at April 28, 2020 and continues to evaluate all contingent funding facilities available during this time including the Paycheck Protection Program Lending Facility provided by the Federal Reserve. Tom Wornham, CEO of the Company and the Bank said, “Our growth continues to come from all around our Coastal Southern California footprint and across all of our business lines.  We are very appreciative of the support of our clients and shareholders; as well as the hard work of our Team Members, who are successfully implementing our organic growth strategy.  We have been able to successfully implement our pandemic and business continuity plans, allowing us to continue to run our business safely and soundly.  The COVID-19 environment has produced uncertain economic factors.  We have adjusted the way we do business to protect our Team Members and Clients.  In an effort to mitigate the impact on the Bank, we have also increased our on balance sheet liquidity.  We increased our loan loss reserves, and remain in constant communication with our borrowers, a cornerstone of our relationship based model.”   Rick Sowers, President of the Company and Bank added, “Although this is a challenging time, our Team is performing well and we could not be more proud of them.  Nearly 80% of our Team is working remotely and their focus continues to be on servicing our client relationships and finding new relationships that are attracted to our model of concierge and solution oriented service.  We see our model resonating with more and more prospects and see opportunity in our market positioning.  Additionally, our Team did an exceptional job in implementing the SBA Paycheck Protection Program on the first day it was available, something we are very proud of.”The Company reported net income of $1.90 million or $0.34 per diluted share for the quarter ended March 31, 2020 compared with net income of $1.6 million or $0.30 per diluted share for the same period last year.  Net interest income was $11.5 million for the first quarter of 2020, representing a $462 thousand or 4%, increase compared to the fourth quarter of 2019 and a $1.9 million or 20% increase, compared to the same period in 2019.  Net interest margin for the first quarter was 4.46% compared with 4.47% for the fourth quarter and 4.77% for the same period in 2019.  The yield on earning assets for the quarter was 5.35% compared with 5.44% in the fourth quarter and 5.61% for the same period in 2019.  The yield on loans for the quarter increased to 5.99% compared to 5.98% in the fourth quarter and decreased from 6.07% in the first quarter of 2019.  The cost of total funding sources was 0.95% for the quarter compared with 1.04% in the fourth quarter and 0.90% for the same period in 2019.  The decrease in funding costs was due to repricing of floating rate deposits costs and calling and repricing wholesale funding.  The increase in funding costs compared to the first quarter of 2019 is partially due to increased cost of subordinated debt that was issued in the second quarter of 2019.     Non-interest income was $1.1 million for the first quarter of 2020, representing a $125 thousand or 12% increase compared to the fourth quarter of 2019 and a $594 thousand or 108% increase compared to the same period in 2019.  The increase in non-interest income is primarily due to increases in SBA loan sales compared with the fourth quarter and first quarter of 2019. Non-interest expense was $8.7 million for the first quarter of 2020 representing a $99 thousand increase, or 1%, compared to the fourth quarter of 2019 and a $1.1 million, or 14% increase, compared to the same period in 2019.  The increase was primarily due to increases in salaries and commissions and professional fees partially offset by decreases in data processing and other non-interest expense. The increase compared to the first quarter of 2019 was due to increases in salaries and benefits, facilities and professional services, associated with increased headcount.The Company increased total assets to $1.2 billion at March 31, 2020, representing an increase of $120 million or 11% compared to the fourth quarter of 2019 and $333 million or 39% compared to the same period in 2019.  Total loans increased $8.5 million, or 1%, from the fourth quarter to $894.1 million at March 31, 2020 and increased $180.7 million, or 25%, from the first quarter of 2019. The Allowance for Loan Losses increased $997 thousand to $9.6 million in the quarter with a resulting coverage ratio of 1.07% compared to $8.6 million or 0.97% at the fourth quarter of 2019 and $6.6 million or 0.93% at the first quarter of 2019.  The increase in the Allowance for Loan Losses was primarily due to qualitative factors related to the general economic outlook in the markets we serve and the potential impact on the loan portfolio resulting from COVID-19.  As of April 28, 2020, thirty-nine loans totaling $73.0 million were on deferral status and continue to accrue interest.  Additionally, one credit, unrelated to COVID-19 was placed on non-accrual status and the Company is confident in our real estate secured position with minimal loss exposure. “The first quarter of 2020 was influenced by reactions and preparations for the disruption caused by the global health crisis and the resultant economic crisis.  I am pleased to report that our Board and management immediately implemented systems, plans and processes to mitigate the impact of the COVID-19 pandemic on our employees, clients and communities,” said Selwyn Isakow, Chairman of the Board of PBAM and the Bank.  “Our management team is focused on assessing the risks in our loan portfolio and have been working on assisting our clients as appropriate, while exploring opportunities in this period of industry dislocation, as evidenced by the strong deposit growth during the quarter.  CalPrivate Bank, as a preferred SBA provider, is participating in the Paycheck Protection Program launched by the Treasury and Small Business Administration.  In these unprecedented times, we are also refocusing our charitable giving and assistance based on the needs of the communities we serve.  The efforts of our Team Members has been nothing short of extraordinary during this disruptive period, for which we are most appreciative.” About Private Bancorp of America, Inc.Private Bancorp of America, Inc. (OTCQX: PBAM), is the holding company for CalPrivate Bank.  CalPrivate Bank provides a Distinctly Different banking experience through unparalleled service and creative funding solutions to high net worth individuals, professionals, locally owned businesses and real estate entrepreneurs.  Customers are serviced through offices in Coronado, San Diego, La Jolla, Newport Beach, El Segundo and Beverly Hills as well as efficient electronic banking offerings. The Bank also offers various portfolio and government guaranteed lending programs, including SBA and cross-border Export-Import Bank programs.  CalPrivate Bank is an SBA Preferred Lender and a Bauer Financial 5 star rated bank.Investor Relations ContactThomas V. Wornham
CEO
Private Bancorp of America, Inc.
(858) 875-6900Safe Harbor ParagraphThis press release includes forward-looking statements that involve inherent risks and uncertainties. Private Bancorp of America, Inc. cautions readers that a number of important factors could cause actual results to differ materially from those in the forward‐looking statements. These factors include the effects of the COVID-19 pandemic and related government actions on the Bank and its customers, loan losses, economic conditions and competition in the geographic and business areas in which Private Bancorp of America, Inc. operates, our ability to successfully integrate and develop business through the addition of new personnel and facilities and merged banks, whether our efforts to expand loan, product and service offerings will prove profitable, the effects of the bank mergers and acquisitions in our markets, system failures and internet security, 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.