The Private Bank of California Reports Third Quarter 2012 Results

Results Reflect Continued Strong Performance

LOS ANGELES--()--The Private Bank of California (the “Bank”) (OTCBB:PBCA) today announced its unaudited financial results for the quarter ended September 30, 2012.

Third Quarter 2012 Highlights:

  • Net income available to common shareholders totaled $485,000 for the quarter ($.12 per diluted share), compared to $643,000 for the same period in 2011. Year-to-date net income available to common shareholders totaled $1,493,000 ($.38 per diluted share), up 31% from $1,141,000 in 2011:
              2012   2011
Income before income taxes $ 2,208,000 $ 1,558,000
Provision for income taxes 640,000 1,000
Net income 1,568,000 1,557,000
Preferred stock dividends 75,000 415,000
Net income available to common shareholders $ 1,493,000 $ 1,142,000
 
  • Income before the provisions for credit losses and income taxes was $1,026,000 for the quarter ended September 30, 2012, consistent with the $1,044,000 reported for the same period in the prior year.
  • Net interest income totaled $4,582,000 for the quarter ended September 30, 2012, an improvement over the linked quarter’s $4,440,000. Year-to-date 2012 net interest income totaled $13,320,000, a 20% increase over the prior year.
  • The Bank’s operating leverage for the quarter ended September 30, 2012 declined slightly from the same quarter in the prior year due to infrastructure investments such as the opening of the Orange County Office in June 2012 and compliance, risk and support staffing additions commensurate with the Bank’s growth. Realized net gains from the sale of securities available-for-sale totaling $403,000 and $1,314,000 for the quarter and year-to-date ended September 30, 2012 have been used to support and fund the Bank’s infrastructure investment initiatives.
  • Total assets grew $46 million or 7% from the linked quarter and $118 million or 21% year-over-year to $685 million at September 30, 2012.
  • Total deposits rose $28 million or 5% from the linked quarter and $84 million or 17% from year-end 2011 to $580 million at September 30, 2012. Demand deposits totaled $273 million and accounted for 47% of total deposits at September 30, 2012 compared to 45% of total deposits at the linked quarter end and 44% at September 30, 2011.
  • Total earning loans were $328 million at September 30, 2012, a $12 million or 4% increase from the linked quarter and a $29 million or 10% increase from year-end 2011.
  • Non-accrual loans totaled $4.1 million at September 30, 2012, accounting for 1% of total loans outstanding and representing an increase of $1.3 million from the linked quarter. The Bank had no earning loans past due 90 days or more at September 30 and June 30, 2012, as well as at December 31 and September 30, 2011. At September 30, 2012, the coverage ratio of the allowance for credit losses to non-accrual loans was 146%.
  • The allowance for credit losses was $5.9 million or 1.79% of total loans at September 30, 2012, compared to $5.3 million or 1.76% at year-end 2011 and $4.5 million or 1.67% in the same quarter of the prior year. The provision for credit losses for the quarter and year-to-date ended September 30, 2012 totaled $319,000 and $796,000, respectively, and is primarily attributable to loan growth. Net charge-offs for the quarter and year-to-date ended September 30, 2012 totaled $254,000 and $190,000, respectively.
  • Securities available-for-sale at estimated fair value totaled $313 million at September 30, 2012, up $29 million or 10% from the linked quarter and $46 million or 17% from year-end 2011. At September 30, 2012, the Bank’s securities available-for-sale portfolio had an unrealized gain totaling $6 million, rising from $4.6 million at the linked quarter and $4.1 million at year-end 2011.
  • The Bank’s capital ratios continue to significantly exceed all regulatory guidelines for “well-capitalized” financial institutions:
             

Actual
09/30/12

 

“Well-capitalized”
minimum

Tier 1 leverage ratio 7.33 % 5.00 %
Tier 1 risk-based capital ratio 13.49 % 6.00 %
Total risk-based capital ratio 14.74 % 10.00 %
 

“We are quite pleased with our growth this past quarter, as our Orange County office officially opened and continues to gain momentum,” says President Richard A. Smith. “In addition, demand is increasing and we anticipate a nice surge in loans in the final quarter of 2012.”

In August 2012, its Board of Directors approved the acquisition of the Bank by First PacTrust Bancorp, the holding company for PacTrust Bank and Beach Business Bank. The Private Bank of California will be merged into Beach Business Bank, but it was announced that the combined entity will retain The Private Bank of California name following the closing of the transaction. The transaction is subject to regulatory and shareholder approvals. “This merger enables the Bank to continue growing with better access to resources, improved systems, and higher lending limits,” states Chief Executive Officer David R. Misch.

“We are thrilled about our recently announced future partnership with First PacTrust Bancorp, a result of the Bank’s strong growth since inception. Our three lines of business – Private, Entertainment and Business Banking – and culture are a strategic and complementary fit with Beach Business Bank, which handles small business, SBA lending, medical practices and retail banking. With FirstPacTrust’s support, we can now scale to meet our clients’ growing needs, offer broader products, and ultimately achieve the long-term vision of being a multi-billion dollar financial institution,” adds Misch.

For more information on the merger visit TPBOC.com/newsroom; for more information on the Bank visit TPBOC.com.

About The Private Bank of California

The Private Bank of California is a full-service depository financial institution that specializes in Private, Entertainment and Business Banking and caters to a select group of individuals and private companies. The Bank is a member of the Federal Deposit Insurance Corporation, chartered in California and administratively headquartered at 10100 Santa Monica Boulevard, Suite 2500, Los Angeles 90067. The Bank has Branch Offices in Century City (10100 Santa Monica Boulevard, Suite 2430, Los Angeles 90067), Hollywood (7083 Hollywood Boulevard, Suite 650, Los Angeles 90028), and Orange County (1920 Main Street, Suite 1140, Irvine, California 92614), as well as a Loan Production Office in Downtown Los Angeles (601 South Figueroa Street, Suite 1850, Los Angeles 90017). Additional information is available at www.tpboc.com or by calling 310.286.0710.

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. These forward-looking statements relate to The Private Bank of California’s current expectations regarding deposit and loan growth and operating results. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a decline in economic conditions, (3) an increase in competition among financial service providers impacting on the Bank’s operating results and ability to attract deposit and loan customers and the quality of the Bank’s earning assets and (4) an increase in government regulation. The Bank does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

THE PRIVATE BANK OF CALIFORNIA
FINANCIAL HIGHLIGHTS (Unaudited)
       
September 30, June 30,
2012 2011 2012
 
AT END OF THE PERIOD:
 
Total assets $ 685,073,000 $ 566,930,000 $ 638,746,000
 
Securities available-for-sale, at fair value $ 313,190,000 $ 256,963,000 $ 284,298,000
 
Total loans $ 331,845,000 $ 272,384,000 $ 318,049,000
Less allowance for credit losses (5,928,000 ) (4,544,000 ) (5,863,000 )
Net loans $ 325,917,000   $ 267,840,000   $ 312,186,000  
 
Transactional deposit accounts $ 294,250,000 $ 233,333,000 $ 268,642,000
Money market deposit accounts 210,070,000 174,695,000 207,005,000
Other nontransactional deposit accounts 76,171,000   75,336,000   77,045,000  
Total deposits $ 580,491,000   $ 483,364,000   $ 552,692,000  
 
Total shareholders' equity $ 52,412,000 $ 48,799,000 $ 50,626,000
 
Allowance for credit losses to total loans ratio 1.79 % 1.67 % 1.84 %
 
Tier 1 leverage ratio 7.33 % 8.53 % 7.34 %
Tier 1 risk-based capital ratio 13.49 % 15.43 % 13.58 %
Total risk-based capital ratio 14.74 % 16.69 % 14.84 %
 
FOR THE QUARTER ENDED:
 
Net interest income $ 4,582,000 $ 3,901,000 $ 4,440,000
Provision for credit losses 319,000 161,000 39,000
Gain on the sale of securities-available-for-sale 403,000 16,000 393,000
Noninterest income 121,000 54,000 469,000
Noninterest expense 4,082,000   2,927,000   4,030,000  
Income (loss) before income taxes 705,000 883,000 840,000
Provision for income taxes 195,000   ---   255,000  
Net income $ 510,000   $ 883,000   $ 585,000  
 
Net income $ 510,000 $ 883,000 $ 585,000
Less preferred stock dividends and adjustments (25,000 ) (240,000 ) (25,000 )
Net income available to common shareholders $ 485,000   $ 643,000   $ 560,000  
 
Net income per common share outstanding-basic $ 0.13 $ 0.17 $ 0.15
Average common shares outstanding 3,842,481 3,825,594 3,833,836
 
Net income per common share outstanding-diluted $ 0.12 $ 0.17 $ 0.15
Average common shares outstanding-diluted 3,955,487 3,825,594 3,833,836
 
YEAR-TO-DATE:
 
Net interest income $ 13,320,000 $ 11,136,000
Provision for credit losses 796,000 788,000
Gain on the sale of securities-available-for-sale 1,314,000 362,000
Other noninterest income 268,000 118,000
Noninterest expense 11,898,000   9,270,000  
Income before income taxes 2,208,000 1,558,000
Provision for income taxes 640,000   1,000  
Net income $ 1,568,000   $ 1,557,000  
 
Net income $ 1,568,000 $ 1,557,000
Less preferred stock dividends and adjustments (75,000 ) (415,000 )
Net income available to common shareholders $ 1,493,000   $ 1,142,000  
 
Net income per common share outstanding-basic $ 0.39 $ 0.30
Average common shares outstanding-basic 3,833,629 3,826,378
 
Net income per common share outstanding-diluted $ 0.38 $ 0.30
Average common shares outstanding-diluted 3,946,989 3,826,378
 

Contacts

The Private Bank of California
David R. Misch
Chief Executive Officer
310.728.1949 (direct)
drmisch@tpboc.com
or
Joyce N. Kaneda
Executive Vice President
Chief Financial Officer
310.728.1948 (direct)
jnkaneda@tpboc.com
or
Stacey Kaszton
La Voz Marketing
213.925.8177 (direct)
stacey@lavozmarketing.com

Release Summary

The Private Bank of California announces its third quarter 2012 financial results which reflect continued strong performance.

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Contacts

The Private Bank of California
David R. Misch
Chief Executive Officer
310.728.1949 (direct)
drmisch@tpboc.com
or
Joyce N. Kaneda
Executive Vice President
Chief Financial Officer
310.728.1948 (direct)
jnkaneda@tpboc.com
or
Stacey Kaszton
La Voz Marketing
213.925.8177 (direct)
stacey@lavozmarketing.com