Second Quarter 2024 Highlights
- Net income for the second quarter of 2024 of $7.8 million, compared to $7.9 million in the prior quarter and $15.5 million (GAAP basis), or $8.3 million(1) (as adjusted), in the second quarter of 2023. The second quarter of 2023 included loan recoveries of $8.7 million and a $1.6 million benefit from legal fees waived or collected related to the settlement of the ANI loan lawsuit (see non-GAAP reconciliation in the accompanying financial tables of this press release). Net income for the second quarter of 2024 represents a return on average assets of 1.40% and a return on average tangible common equity of 15.99%
- Diluted earnings per share for the second quarter of 2024 of $1.35, compared to $1.36 in the prior quarter and $2.69 (GAAP basis), or $1.43(1) (as adjusted), in the second quarter of 2023
- Loans held-for-investment ("HFI") totaled $1.98 billion as of June 30, 2024, an increase of $72.7 million or 3.8% from March 31, 2024. Loans HFI increased 15.3% year over year
- Provision for credit losses for the second quarter of 2024 was $2.1 million, compared to $0.2 million for the prior quarter and a net reversal of $7.1 million for the second quarter of 2023. The allowance for loan losses was 1.34% of loans HFI as of June 30, 2024
- Credit trends remained positive with total criticized and classified loans at $16.9 million, or 0.85% of total loans, down from the prior quarter of $27.4 million, or 1.44% of total loans
- Total deposits were $2.00 billion as of June 30, 2024, an increase of $97.1 million or 5.1% from March 31, 2024. Total deposits increased 17.8% year over year. Federal Home Loan Bank advances decreased by $5.0 million as a result of deposit growth. Core deposits were $1.74 billion as of June 30, 2024, an increase of $136.6 million or 8.5% from March 31, 2024
- Net interest margin was 4.48% for the second quarter of 2024, as compared to 4.31% for the prior quarter and 4.73% for the second quarter of 2023
- Total cost of funding sources was 2.78% for the second quarter of 2024, an increase from 2.70% in the prior quarter and 1.82% in the second quarter of 2023
- Tangible book value per share was $34.65 as of June 30, 2024, an increase of $1.10 since March 31, 2024 primarily as a result of strong earnings. Tangible book value per share increased 3.3% quarter-over-quarter and 20.2% year over year.
LA JOLLA, Calif., July 19, 2024 (GLOBE NEWSWIRE) -- Private Bancorp of America, Inc. (OTCQX: PBAM), ("Company") and CalPrivate Bank ("Bank") announced unaudited financial results for the second fiscal quarter ended June 30, 2024. The Company reported net income of $7.8 million, or $1.35 per diluted share, for the second quarter of 2024, compared to $7.9 million, or $1.36, in the prior quarter, and $15.5 million (GAAP basis), or $8.3 million(1) (as adjusted), and $2.69 (GAAP basis), or $1.43(1) (as adjusted), in the second quarter of 2023.
Rick Sowers, President and CEO of the Company and the Bank stated, "We experienced continued strong loan and deposit growth in the second quarter fueled by continued expansion of Relationships and the acquisition of new Clients. Growth came from all geographies of the bank and business lines. We also saw continued traction for our Legal Services and Cross Border verticals as well. The Team continues to bring discipline to our lending which has yielded expanded loan rates and solid Net Interest Income growth."
(1) A reconciliation of net income to adjusted net income and diluted earnings per share to adjusted earnings per share is provided on page 13
Sowers added, "We were very pleased to be recognized in the American Banker as one of the top performing banks in the country in our asset class. This recognition reinforces that through an outstanding, hard working and dedicated Team, you create satisfied Clients and Shareholders."
"The Company continues to exhibit successful customer acquisition activity despite a challenging interest rate environment. Additionally, the Company is investing in people and infrastructure, including strong risk management, product strategy and innovation needed to support the continued growth of the CalPrivate franchise," said Selwyn Isakow, Chairman of the Board of the Company and the Bank.
STATEMENT OF INCOME
Net Interest Income
Net interest income for the second quarter of 2024 totaled $24.7 million, an increase of $1.9 million or 8.4% from the prior quarter and an increase of $2.0 million or 8.6% from the second quarter of 2023. The increase from the prior quarter was driven primarily by 4.4% growth in interest-earning assets and a 24 basis point increase in asset yields as interest income increased by $2.9 million. Interest income in the second quarter of 2024 included $0.6 million from nonaccrual interest on a loan that was paid off during the quarter, contributing 11 basis points to asset yields. Partially offsetting this was an increase of $1.0 million in interest expense, which resulted from a 7.5% increase in average interest bearing-liabilities and a 1 basis point increase in the cost of interest-bearing liabilities.
Net Interest Margin
Net interest margin for the second quarter of 2024 was 4.48%, compared to 4.31% for the prior quarter and 4.73% in the second quarter of 2023. The 17 basis point increase in net interest margin from the prior quarter was primarily due to higher yields on loans, which included 11 basis points from nonaccrual interest on a loan that was paid off during the quarter, partially offset by a higher cost on total deposits. The yield on earning assets was 7.02% for the second quarter of 2024 compared to 6.78% for the prior quarter, and the cost of interest-bearing liabilities was 3.78% for the second quarter of 2024 compared to 3.77% in the prior quarter. The cost of total deposits was 2.67% for the second quarter of 2024 compared to 2.61% in the prior quarter. The cost of core deposits, which excludes brokered deposits, was 2.28% in the second quarter of 2024 compared to 2.14% in the prior quarter. The spot rate for total deposits was 2.61% as of June 30, 2024, compared to 2.66% at March 31, 2024.
Provision for Credit Losses
Provision expense for credit losses for the second quarter of 2024 was $2.1 million, compared to $0.2 million in the prior quarter and a net reversal of $7.1 million for the second quarter of 2023. The increase from the prior quarter was primarily due to the $72.7 million increase in loans HFI and higher reserve rates on commercial real estate loans due to CECL model updates. For more details, please refer to the "Asset Quality" section below.
Noninterest Income
Noninterest income was $1.5 million for the second quarter of 2024, compared to $1.4 million in the prior quarter and $1.1 million in the second quarter of 2023. SBA loan sales for the second quarter of 2024 were $8.0 million with a 12.16% average trade premium resulting in a net gain on sale of $661 thousand, compared with $8.9 million with a 10.84% average trade premium resulting in a net gain on sale of $681 thousand in the prior quarter. Management expects continued softness in the market for SBA 7a loans.
Noninterest Expense
Noninterest expense was $13.0 million for the second quarter of 2024, compared to $12.8 million in the prior quarter and $8.8 million in the second quarter of 2023. The efficiency ratio was 49.46% for the second quarter of 2024 compared to 52.84% in the prior quarter and 37.04% in the second quarter of 2023. The decrease in the efficiency ratio from the prior quarter was primarily due to the increase in net interest income described above, while the increase in noninterest expense was relatively modest.
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 $3.3 million for the second quarter of 2024, compared to $3.3 million for the prior quarter. The effective tax rate for the second quarter of 2024 was 29.5%, compared to 29.5% in the prior quarter and 29.7% in the second quarter of 2023.
STATEMENT OF FINANCIAL CONDITION
As of June 30, 2024, total assets were $2.29 billion, an increase of $97.9 million since March 31, 2024. The increase in assets from the prior quarter was primarily due to higher loans receivable, cash balances and investment securities. Total cash and due from banks was $158.4 million as of June 30, 2024, an increase of $16.9 million or 11.9%, since March 31, 2024, primarily due to funds that were deposited at the end of the quarter and deployed in the following month. Loans HFI totaled $1.98 billion as of June 30, 2024, an increase of $72.7 million or 3.8% since March 31, 2024. Investment securities available-for-sale ("AFS") were $121.7 million as of June 30, 2024, an increase of $7.7 million or 6.7% since March 31, 2024, as a result of new securities purchased. As of June 30, 2024, the net unrealized loss on the AFS investment securities portfolio, which is comprised mostly of US Treasury and Government Agency debt, was $13.0 million (pre-tax) compared to a loss of $12.4 million (pre-tax) as of March 31, 2024. The average duration of the Bank's AFS portfolio is 3.7 years. The Company has no held-to-maturity securities.
Total deposits were $2.00 billion as of June 30, 2024, an increase of $97.1 million since March 31, 2024. During the quarter, core deposits increased by $136.6 million, which was driven by a $95.9 million increase in interest-bearing core deposits (including balances in the Intrafi ICS and CDARS programs) and a $40.8 million increase in noninterest-bearing core deposits. Deposit mix has continued to shift while short-term interest rates remain higher. Noninterest-bearing deposits represent 32.0% of total core deposits. Uninsured deposits, net of collateralized and fiduciary deposit accounts, represent 47.9% of total deposits as of June 30, 2024.
As of June 30, 2024, total available liquidity was $1.7 billion or 181.5% of uninsured deposits, net of collateralized and fiduciary deposit accounts. Total available liquidity is comprised of $271 million of on-balance sheet liquidity (cash and investment securities) and $1.5 billion of unused borrowing capacity.
Asset Quality and Allowance for Credit Losses ("ACL")
As of June 30, 2024, the allowance for loan losses was $26.6 million or 1.34% of loans HFI, compared to $24.7 million or 1.29% as of March 31, 2024. The increase in the coverage ratio from March 31, 2024 primarily reflects updates to the third-party national dataset of historical loss rates used in the commercial real estate lifetime loss rate model. The Company continues to have strong credit metrics and its nonperforming assets are 0.11% of total assets as of June 30, 2024 compared to 0.21% as of March 31, 2024. The reserve for unfunded commitments was $1.9 million as of June 30, 2024, compared to $1.7 million as of March 31, 2024. Given the credit quality of the loan portfolio, management believes we are sufficiently reserved.
At June 30, 2024 and March 31, 2024, there are no doubtful credits and classified assets were $10.1 million and $10.8 million, respectively. Total classified assets consisted of eight loans as of June 30, 2024, which included seven loans totaling $7.6 million secured by real estate with a weighted average LTV of 43.4%. The remaining loan was a $2.5 million nonaccrual commercial and industrial loan with a specific reserve of $1.5 million.
Capital Ratios (2)
The Bank's capital ratios were in excess of the levels established for "well capitalized" institutions and are as follows:
| June 30, 2024 (2) | March 31, 2024 | |
| CalPrivate Bank | ||
| Tier I leverage ratio | 10.00% | 10.08% |
| Tier I risk-based capital ratio | 11.23% | 11.19% |
| Total risk-based capital ratio | 12.48% | 12.44% |
(2)June 30, 2024 capital ratios are preliminary and subject to change.
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.
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 adjusted income before provision for income taxes, adjusted net income, adjusted diluted earnings per share ("Adjusted EPS"), 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. 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, permit investors to effectively analyze financial trends of our business activities, and 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 in good faith believe 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.
PRIVATE BANCORP OF AMERICA, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in thousands)
| Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | ||||||||||
| Assets | ||||||||||||
| Cash and due from banks | $ | 13,545 | $ | 13,136 | $ | 23,273 | ||||||
| Interest-bearing deposits in other financial institutions | 12,502 | 34,790 | 27,566 | |||||||||
| Interest-bearing deposits at Federal Reserve Bank | 132,330 | 93,575 | 85,020 | |||||||||
| Total cash and due from banks | 158,377 | 141,501 | 135,859 | |||||||||
| Interest-bearing time deposits with other institutions | 4,097 | 4,032 | 7,661 | |||||||||
| Investment debt securities available for sale | 121,725 | 114,067 | 94,574 | |||||||||
| Loans held for sale | - | 383 | 1,982 | |||||||||
| Loans, net of deferred fees and costs and unaccreted discounts | 1,979,720 | 1,906,992 | 1,717,705 | |||||||||
| Allowance for loan losses | (26,591 | ) | (24,693 | ) | (22,588 | ) | ||||||
| Loans held-for-investment, net of allowance | 1,953,129 | 1,882,299 | 1,695,117 | |||||||||
| Federal Home Loan Bank stock, at cost | 9,586 | 8,915 | 8,915 | |||||||||
| Right of use asset | 4,719 | 2,765 | 2,525 | |||||||||
| Premises and equipment, net | 2,207 | 1,804 | 1,539 | |||||||||
| Servicing assets, net | 2,164 | 2,203 | 2,875 | |||||||||
| Accrued interest receivable | 7,906 | 7,931 | 6,118 | |||||||||
| Other assets | 21,774 | 21,877 | 19,572 | |||||||||
| Total assets | $ | 2,285,684 | $ | 2,187,777 | $ | 1,976,737 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Liabilities | ||||||||||||
| Noninterest bearing | $ | 557,055 | $ | 516,294 | $ | 657,980 | ||||||
| Interest bearing | 1,444,671 | 1,388,381 | 1,041,192 | |||||||||
| Total deposits | 2,001,726 | 1,904,675 | 1,699,172 | |||||||||
| FHLB borrowings | 48,000 | 53,000 | 66,000 | |||||||||
| Other borrowings | 17,965 | 17,963 | 17,958 | |||||||||
| Accrued interest payable and other liabilities | 16,551 | 18,107 | 26,396 | |||||||||
| Total liabilities | 2,084,242 | 1,993,745 | 1,809,526 | |||||||||
| Shareholders' equity | ||||||||||||
| Common stock | 74,636 | 74,105 | 73,379 | |||||||||
| Additional paid-in capital | 3,717 | 4,108 | 3,405 | |||||||||
| Retained earnings | 132,179 | 124,464 | 100,281 | |||||||||
| Accumulated other comprehensive (loss) income, net | (9,090 | ) | (8,645 | ) | (9,854 | ) | ||||||
| Total shareholders' equity | 201,442 | 194,032 | 167,211 | |||||||||
| Total liabilities and shareholders' equity | $ | 2,285,684 | $ | 2,187,777 | $ | 1,976,737 | ||||||
PRIVATE BANCORP OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
| For the three months ended | Year to Date | |||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | ||||||||||||||||
| Interest Income | ||||||||||||||||||||
| Loans | $ | 35,538 | $ | 33,006 | $ | 28,270 | $ | 68,544 | $ | 54,498 | ||||||||||
| Investment securities | 1,090 | 979 | 560 | 2,069 | 1,140 | |||||||||||||||
| Deposits in other financial institutions | 2,034 | 1,799 | 1,933 | 3,833 | 3,083 | |||||||||||||||
| Total interest income | 38,662 | 35,784 | 30,763 | 74,446 | 58,721 | |||||||||||||||
| Interest Expense | ||||||||||||||||||||
| Deposits | 13,040 | 12,130 | 6,581 | 25,170 | 11,505 | |||||||||||||||
| Borrowings | 952 | 886 | 1,474 | 1,838 | 2,340 | |||||||||||||||
| Total interest expense | 13,992 | 13,016 | 8,055 | 27,008 | 13,845 | |||||||||||||||
| Net interest income | 24,670 | 22,768 | 22,708 | 47,438 | 44,876 | |||||||||||||||
| Provision (reversal) for credit losses | 2,136 | 233 | (7,149 | ) | 2,369 | (7,076 | ) | |||||||||||||
| Net interest income after provision for credit losses | 22,534 | 22,535 | 29,857 | 45,069 | 51,952 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Service charges on deposit accounts | 430 | 388 | 310 | 818 | 658 | |||||||||||||||
| Net gain on sale of loans | 661 | 681 | 171 | 1,342 | 645 | |||||||||||||||
| Other noninterest income | 447 | 357 | 573 | 804 | 1,216 | |||||||||||||||
| Total noninterest income | 1,538 | 1,426 | 1,054 | 2,964 | 2,519 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Compensation and employee benefits | 8,836 | 8,861 | 7,189 | 17,697 | 15,219 | |||||||||||||||
| Occupancy and equipment | 822 | 770 | 795 | 1,592 | 1,601 | |||||||||||||||
| Data processing | 1,183 | 1,058 | 878 | 2,241 | 1,822 | |||||||||||||||
| Professional services | 424 | 488 | (836 | ) | 912 | (398 | ) | |||||||||||||
| Other expenses | 1,697 | 1,606 | 776 | 3,303 | 2,115 | |||||||||||||||
| Total noninterest expense | 12,962 | 12,783 | 8,802 | 25,745 | 20,359 | |||||||||||||||
| Income before provision for income taxes | 11,110 | 11,178 | 22,109 | 22,288 | 34,112 | |||||||||||||||
| Provision for income taxes | 3,283 | 3,294 | 6,575 | 6,577 | 9,604 | |||||||||||||||
| Net income | $ | 7,827 | $ | 7,884 | $ | 15,534 | $ | 15,711 | $ | 24,508 | ||||||||||
| Net income available to common shareholders | $ | 7,761 | $ | 7,832 | $ | 15,407 | $ | 15,595 | $ | 24,345 | ||||||||||
| Earnings per share | ||||||||||||||||||||
| Basic earnings per share | $ | 1.36 | $ | 1.38 | $ | 2.72 | $ | 2.74 | $ | 4.32 | ||||||||||
| Diluted earnings per share | $ | 1.35 | $ | 1.36 | $ | 2.69 | $ | 2.71 | $ | 4.25 | ||||||||||
| Average shares outstanding | 5,702,938 | 5,679,843 | 5,654,435 | 5,688,135 | 5,631,442 | |||||||||||||||
| Diluted average shares outstanding | 5,762,616 | 5,754,937 | 5,726,522 | 5,755,250 | 5,722,645 | |||||||||||||||
PRIVATE BANCORP OF AMERICA, INC.
Consolidated average balance sheet, interest, yield and rates
(Unaudited)
(Dollars in thousands)
| For the three months ended | ||||||||||||||||||||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | ||||||||||||||||||||||||||||||||||
| Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | ||||||||||||||||||||||||||||
| Interest-Earnings Assets | ||||||||||||||||||||||||||||||||||||
| Deposits in other financial institutions | $ | 152,563 | $ | 2,034 | 5.36 | % | $ | 135,511 | $ | 1,799 | 5.34 | % | $ | 140,939 | $ | 1,933 | 5.50 | % | ||||||||||||||||||
| Investment securities | 123,876 | 1,090 | 3.52 | % | 119,690 | 979 | 3.27 | % | 110,332 | 560 | 2.03 | % | ||||||||||||||||||||||||
| Loans, including LHFS | 1,939,746 | 35,538 | 7.37 | % | 1,868,308 | 33,006 | 7.11 | % | 1,675,790 | 28,270 | 6.77 | % | ||||||||||||||||||||||||
| Total interest-earning assets | 2,216,185 | 38,662 | 7.02 | % | 2,123,509 | 35,784 | 6.78 | % | 1,927,061 | 30,763 | 6.40 | % | ||||||||||||||||||||||||
| Noninterest-earning assets | 25,675 | 25,469 | 32,741 | |||||||||||||||||||||||||||||||||
| Total Assets | $ | 2,241,860 | $ | 2,148,978 | $ | 1,959,802 | ||||||||||||||||||||||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||||||||||||||||||
| Interest bearing DDA, excluding brokered | 130,361 | 463 | 1.43 | % | 109,838 | 441 | 1.61 | % | 99,334 | 364 | 1.47 | % | ||||||||||||||||||||||||
| Savings & MMA, excluding brokered | 845,856 | 7,354 | 3.50 | % | 765,770 | 6,421 | 3.37 | % | 645,219 | 3,570 | 2.22 | % | ||||||||||||||||||||||||
| Time deposits, excluding brokered | 164,714 | 1,690 | 4.13 | % | 155,703 | 1,583 | 4.09 | % | 101,241 | 719 | 2.85 | % | ||||||||||||||||||||||||
| Total deposits, excluding brokered | 1,140,931 | 9,507 | 3.35 | % | 1,031,311 | 8,445 | 3.29 | % | 845,794 | 4,653 | 2.21 | % | ||||||||||||||||||||||||
| Total brokered deposits | 284,290 | 3,533 | 5.00 | % | 287,885 | 3,685 | 5.15 | % | 155,577 | 1,928 | 4.97 | % | ||||||||||||||||||||||||
| Total Interest-Bearing Deposits | 1,425,221 | 13,040 | 3.68 | % | 1,319,196 | 12,130 | 3.70 | % | 1,001,371 | 6,581 | 2.64 | % | ||||||||||||||||||||||||
| FHLB advances | 47,373 | 581 | 4.93 | % | 49,935 | 614 | 4.95 | % | 96,626 | 1,202 | 4.99 | % | ||||||||||||||||||||||||
| Other borrowings | 17,966 | 371 | 8.31 | % | 17,962 | 272 | 6.09 | % | 17,971 | 272 | 6.07 | % | ||||||||||||||||||||||||
| Total Interest-Bearing Liabilities | 1,490,560 | 13,992 | 3.78 | % | 1,387,093 | 13,016 | 3.77 | % | 1,115,968 | 8,055 | 2.90 | % | ||||||||||||||||||||||||
| Noninterest-bearing deposits | 535,878 | 553,541 | 655,169 | |||||||||||||||||||||||||||||||||
| Total Funding Sources | 2,026,438 | 13,992 | 2.78 | % | 1,940,634 | 13,016 | 2.70 | % | 1,771,137 | 8,055 | 1.82 | % | ||||||||||||||||||||||||
| Noninterest-bearing liabilities | 16,334 | 18,018 | 26,492 | |||||||||||||||||||||||||||||||||
| Shareholders' equity | 199,088 | 190,326 | 162,173 | |||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 2,241,860 | $ | 2,148,978 | $ | 1,959,802 | ||||||||||||||||||||||||||||||
| Net interest income/spread | $ | 24,670 | 4.24 | % | $ | 22,768 | 4.08 | % | $ | 22,708 | 4.58 | % | ||||||||||||||||||||||||
| Net interest margin | 4.48 | % | 4.31 | % | 4.73 | % | ||||||||||||||||||||||||||||||
PRIVATE BANCORP OF AMERICA, INC.
Consolidated average balance sheet, interest, yield and rates
(Unaudited)
(Dollars in thousands)
| Year to Date | ||||||||||||||||||||||||
| Jun 30, 2024 | Jun 30, 2023 | |||||||||||||||||||||||
| Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | |||||||||||||||||||
| Interest-Earnings Assets: | ||||||||||||||||||||||||
| Deposits in other financial institutions | $ | 144,037 | $ | 3,833 | 5.35 | % | $ | 132,124 | $ | 3,083 | 4.71 | % | ||||||||||||
| Investment securities | 121,783 | 2,069 | 3.40 | % | 111,506 | 1,140 | 2.06 | % | ||||||||||||||||
| Loans | 1,904,028 | 68,544 | 7.24 | % | 1,636,730 | 54,498 | 6.71 | % | ||||||||||||||||
| Total interest-earning assets | 2,169,848 | 74,446 | 6.90 | % | 1,880,360 | 58,721 | 6.30 | % | ||||||||||||||||
| Noninterest-earning assets | 25,571 | 28,819 | ||||||||||||||||||||||
| Total Assets | $ | 2,195,419 | $ | 1,909,179 | ||||||||||||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||||||
| Interest bearing DDA, excluding brokered | 120,100 | 904 | 1.51 | % | 99,983 | 707 | 1.43 | % | ||||||||||||||||
| Savings & MMA, excluding brokered | 805,813 | 13,775 | 3.44 | % | 632,340 | 5,948 | 1.90 | % | ||||||||||||||||
| Time deposits, excluding brokered | 160,208 | 3,273 | 4.11 | % | 92,187 | 1,175 | 2.57 | % | ||||||||||||||||
| Total deposits, excluding brokered | 1,086,121 | 17,952 | 3.32 | % | 824,510 | 7,830 | 1.92 | % | ||||||||||||||||
| Total brokered deposits | 286,088 | 7,218 | 5.07 | % | 153,794 | 3,675 | 4.82 | % | ||||||||||||||||
| Total Interest-Bearing Deposits | 1,372,209 | 25,170 | 3.69 | % | 978,304 | 11,505 | 2.37 | % | ||||||||||||||||
| FHLB advances | 48,653 | 1,195 | 4.94 | % | 72,801 | 1,796 | 4.97 | % | ||||||||||||||||
| Other borrowings | 17,964 | 643 | 7.20 | % | 17,974 | 544 | 6.10 | % | ||||||||||||||||
| Total Interest-Bearing Liabilities | 1,438,826 | 27,008 | 3.77 | % | 1,069,079 | 13,845 | 2.61 | % | ||||||||||||||||
| Noninterest-bearing deposits | 544,709 | 662,442 | ||||||||||||||||||||||
| Total Funding Sources | 1,983,535 | 27,008 | 2.74 | % | 1,731,521 | 13,845 | 1.61 | % | ||||||||||||||||
| Noninterest-bearing liabilities | 17,176 | 23,140 | ||||||||||||||||||||||
| Shareholders' equity | 194,708 | 154,518 | ||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 2,195,419 | $ | 1,909,179 | ||||||||||||||||||||
| Net interest income/spread | $ | 47,438 | 4.16 | % | $ | 44,876 | 4.69 | % | ||||||||||||||||
| Net interest margin | 4.40 | % | 4.81 | % | ||||||||||||||||||||
PRIVATE BANCORP OF AMERICA, INC.
Condensed Balance Sheets
(Unaudited)
(Dollars in thousands, except per share amounts)
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 158,377 | $ | 141,501 | $ | 178,100 | $ | 198,328 | $ | 135,859 | ||||||||||
| Interest-bearing time deposits with other institutions | 4,097 | 4,032 | 4,000 | 1,500 | 7,661 | |||||||||||||||
| Investment securities | 121,725 | 114,067 | 102,499 | 86,648 | 94,574 | |||||||||||||||
| Loans held for sale | - | 383 | 1,233 | 4,071 | 1,982 | |||||||||||||||
| Total loans held-for-investment | 1,979,720 | 1,906,992 | 1,847,161 | 1,764,846 | 1,717,705 | |||||||||||||||
| Allowance for loan losses | (26,591 | ) | (24,693 | ) | (24,476 | ) | (23,789 | ) | (22,588 | ) | ||||||||||
| Loans held-for-investment, net of allowance | 1,953,129 | 1,882,299 | 1,822,685 | 1,741,057 | 1,695,117 | |||||||||||||||
| Right of use asset | 4,719 | 2,765 | 3,096 | 2,827 | 2,525 | |||||||||||||||
| Premises and equipment, net | 2,207 | 1,804 | 1,700 | 1,447 | 1,539 | |||||||||||||||
| Other assets and interest receivable | 41,430 | 40,926 | 39,155 | 38,341 | 37,480 | |||||||||||||||
| Total assets | $ | 2,285,684 | $ | 2,187,777 | $ | 2,152,468 | $ | 2,074,219 | $ | 1,976,737 | ||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Noninterest Bearing | $ | 557,055 | $ | 516,294 | $ | 572,755 | $ | 595,023 | $ | 657,980 | ||||||||||
| Interest Bearing | 1,444,671 | 1,388,381 | 1,302,615 | 1,174,664 | 1,041,192 | |||||||||||||||
| Total Deposits | 2,001,726 | 1,904,675 | 1,875,370 | 1,769,687 | 1,699,172 | |||||||||||||||
| Borrowings | 65,965 | 70,963 | 74,961 | 99,959 | 83,958 | |||||||||||||||
| Accrued interest payable and other liabilities | 16,551 | 18,107 | 16,354 | 29,894 | 26,396 | |||||||||||||||
| Total liabilities | 2,084,242 | 1,993,745 | 1,966,685 | 1,899,540 | 1,809,526 | |||||||||||||||
| Shareholders' equity | ||||||||||||||||||||
| Common stock | 74,636 | 74,105 | 74,003 | 73,416 | 73,379 | |||||||||||||||
| Additional paid-in capital | 3,717 | 4,108 | 3,679 | 3,584 | 3,405 | |||||||||||||||
| Retained earnings | 132,179 | 124,464 | 116,604 | 108,757 | 100,281 | |||||||||||||||
| Accumulated other comprehensive (loss) income | (9,090 | ) | (8,645 | ) | (8,503 | ) | (11,078 | ) | (9,854 | ) | ||||||||||
| Total shareholders' equity | 201,442 | 194,032 | 185,783 | 174,679 | 167,211 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 2,285,684 | $ | 2,187,777 | $ | 2,152,468 | $ | 2,074,219 | $ | 1,976,737 | ||||||||||
| Book value per common share | $ | 35.03 | $ | 33.94 | $ | 32.48 | $ | 30.63 | $ | 29.32 | ||||||||||
| Tangible book value per common share (1) | $ | 34.65 | $ | 33.55 | $ | 32.08 | $ | 30.20 | $ | 28.82 | ||||||||||
| Shares outstanding | 5,751,143 | 5,717,519 | 5,719,115 | 5,703,350 | 5,702,637 | |||||||||||||||
(1) Non-GAAP measure. See GAAP to non-GAAP Reconciliation table.
PRIVATE BANCORP OF AMERICA, INC.
Condensed Statements of Income
(Unaudited)
(Dollars in thousands, except per share amounts)
| For the three months ended | |||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | |||||||||||||||
| Interest income | $ | 38,662 | $ | 35,784 | $ | 34,063 | $ | 32,878 | $ | 30,763 | |||||||||
| Interest expense | 13,992 | 13,016 | 11,875 | 9,623 | 8,055 | ||||||||||||||
| Net interest income | 24,670 | 22,768 | 22,188 | 23,255 | 22,708 | ||||||||||||||
| Provision (reversal) for credit losses | 2,136 | 233 | 459 | 471 | (7,149 | ) | |||||||||||||
| Net interest income after provision for credit losses | 22,534 | 22,535 | 21,729 | 22,784 | 29,857 | ||||||||||||||
| Service charges on deposit accounts | 430 | 388 | 373 | 313 | 310 | ||||||||||||||
| Net gain on sale of loans | 661 | 681 | 436 | 466 | 171 | ||||||||||||||
| Other noninterest income | 447 | 357 | 435 | 380 | 573 | ||||||||||||||
| Total noninterest income | 1,538 | 1,426 | 1,244 | 1,159 | 1,054 | ||||||||||||||
| Compensation and employee benefits | 8,836 | 8,861 | 7,942 | 7,512 | 7,189 | ||||||||||||||
| Occupancy and equipment | 822 | 770 | 790 | 781 | 795 | ||||||||||||||
| Data processing | 1,183 | 1,058 | 1,001 | 1,064 | 878 | ||||||||||||||
| Professional services | 424 | 488 | 410 | 564 | (836 | ) | |||||||||||||
| Other expenses | 1,697 | 1,606 | 1,625 | 1,922 | 776 | ||||||||||||||
| Total noninterest expense | 12,962 | 12,783 | 11,768 | 11,843 | 8,802 | ||||||||||||||
| Income before provision for income taxes | 11,110 | 11,178 | 11,205 | 12,100 | 22,109 | ||||||||||||||
| Income taxes | 3,283 | 3,294 | 3,346 | 3,611 | 6,575 | ||||||||||||||
| Net income | $ | 7,827 | $ | 7,884 | $ | 7,859 | $ | 8,489 | $ | 15,534 | |||||||||
| Net income available to common shareholders | $ | 7,761 | $ | 7,832 | $ | 7,800 | $ | 8,422 | $ | 15,407 | |||||||||
| Earnings per share | |||||||||||||||||||
| Basic earnings per share | $ | 1.36 | $ | 1.38 | $ | 1.38 | $ | 1.49 | $ | 2.72 | |||||||||
| Diluted earnings per share | $ | 1.35 | $ | 1.36 | $ | 1.36 | $ | 1.47 | $ | 2.69 | |||||||||
| Average shares outstanding | 5,702,938 | 5,679,843 | 5,664,028 | 5,658,340 | 5,654,435 | ||||||||||||||
| Diluted average shares outstanding | 5,762,616 | 5,754,937 | 5,723,735 | 5,709,994 | 5,726,522 | ||||||||||||||
| Performance Ratios | |||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | |||||||||||||||
| ROAA | 1.40 | % | 1.48 | % | 1.51 | % | 1.68 | % | 3.18 | % | |||||||||
| ROAE | 15.81 | % | 16.66 | % | 17.29 | % | 19.43 | % | 38.42 | % | |||||||||
| ROATCE (1) | 15.99 | % | 16.86 | % | 17.53 | % | 19.74 | % | 39.14 | % | |||||||||
| Net interest margin | 4.48 | % | 4.31 | % | 4.33 | % | 4.67 | % | 4.73 | % | |||||||||
| Net interest spread | 4.24 | % | 4.08 | % | 4.11 | % | 4.48 | % | 4.58 | % | |||||||||
| Efficiency ratio (1) | 49.46 | % | 52.84 | % | 50.22 | % | 48.51 | % | 37.04 | % | |||||||||
| Noninterest expense / average assets | 2.32 | % | 2.39 | % | 2.26 | % | 2.34 | % | 1.80 | % | |||||||||
(1) Non-GAAP measure. See GAAP to non-GAAP Reconciliation table.
PRIVATE BANCORP OF AMERICA, INC.
(Unaudited)
| Selected Quarterly Average Balances | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||||||||||||||||
| Total assets | $ | 2,241,860 | $ | 2,148,978 | $ | 2,062,486 | $ | 2,005,197 | $ | 1,959,802 | ||||||||||
| Earning assets | $ | 2,216,185 | $ | 2,123,509 | $ | 2,034,556 | $ | 1,977,009 | $ | 1,927,061 | ||||||||||
| Total loans, including loans held for sale | $ | 1,939,746 | $ | 1,868,308 | $ | 1,788,572 | $ | 1,745,113 | $ | 1,675,790 | ||||||||||
| Total deposits | $ | 1,961,099 | $ | 1,872,737 | $ | 1,788,659 | $ | 1,698,892 | $ | 1,656,540 | ||||||||||
| Total shareholders' equity | $ | 199,088 | $ | 190,326 | $ | 180,287 | $ | 173,347 | $ | 162,173 | ||||||||||
| Loan Balances by Type | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||||||||||||||||
| Commercial Real Estate (CRE): | ||||||||||||||||||||
| Investor owned | $ | 566,314 | $ | 573,587 | $ | 583,069 | $ | 541,088 | $ | 527,819 | ||||||||||
| Owner occupied | 216,876 | 216,123 | 202,106 | 185,296 | 177,177 | |||||||||||||||
| Multifamily | 177,390 | 175,629 | 168,324 | 159,700 | 158,082 | |||||||||||||||
| Secured by single family | 181,744 | 157,092 | 146,370 | 153,132 | 148,464 | |||||||||||||||
| Land and construction | 58,109 | 35,975 | 33,655 | 30,253 | 32,519 | |||||||||||||||
| SBA secured by real estate | 388,271 | 385,416 | 349,676 | 343,576 | 329,403 | |||||||||||||||
| Total CRE | 1,588,704 | 1,543,822 | 1,483,200 | 1,413,045 | 1,373,464 | |||||||||||||||
| Commercial business: | ||||||||||||||||||||
| Commercial and industrial | 378,161 | 352,417 | 350,879 | 337,815 | 332,394 | |||||||||||||||
| SBA non-real estate secured | 10,758 | 8,657 | 9,807 | 11,081 | 9,121 | |||||||||||||||
| Total commercial business | 388,919 | 361,074 | 360,686 | 348,896 | 341,515 | |||||||||||||||
| Consumer | 2,097 | 2,096 | 3,275 | 2,905 | 2,726 | |||||||||||||||
| Total loans held for investment | $ | 1,979,720 | $ | 1,906,992 | $ | 1,847,161 | $ | 1,764,846 | $ | 1,717,705 | ||||||||||
| Deposits by Type | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||||||||||||||||
| Noninterest-bearing DDA | $ | 557,055 | $ | 516,294 | $ | 572,755 | $ | 595,023 | $ | 657,980 | ||||||||||
| Interest-bearing DDA, excluding brokered | 156,253 | 117,129 | 121,829 | 108,508 | 101,064 | |||||||||||||||
| Savings & MMA, excluding brokered | 861,508 | 812,841 | 742,617 | 696,499 | 670,195 | |||||||||||||||
| Time deposits, excluding brokered | 168,664 | 160,605 | 147,583 | 122,622 | 105,757 | |||||||||||||||
| Total deposits, excluding brokered | 1,743,480 | 1,606,869 | 1,584,784 | 1,522,652 | 1,534,996 | |||||||||||||||
| Total brokered deposits | 258,246 | 297,806 | 290,586 | 247,035 | 164,176 | |||||||||||||||
| Total deposits | $ | 2,001,726 | $ | 1,904,675 | $ | 1,875,370 | $ | 1,769,687 | $ | 1,699,172 | ||||||||||
PRIVATE BANCORP OF AMERICA, INC.
(Unaudited)
| Rollforward of Allowance for Credit Losses | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||||||||||||||||
| Allowance for loan losses: | ||||||||||||||||||||
| Beginning balance | $ | 24,693 | $ | 24,476 | $ | 23,789 | $ | 22,588 | $ | 21,135 | ||||||||||
| Provision for loan losses | 1,994 | 251 | 687 | 1,194 | (7,149 | ) | ||||||||||||||
| Net (charge-offs) recoveries | (96 | ) | (34 | ) | - | 7 | 8,602 | |||||||||||||
| Ending balance | 26,591 | 24,693 | 24,476 | 23,789 | 22,588 | |||||||||||||||
| Reserve for unfunded commitments | 1,865 | 1,723 | 1,741 | 1,969 | 2,172 | |||||||||||||||
| Total allowance for credit losses | $ | 28,456 | $ | 26,416 | $ | 26,217 | $ | 25,758 | $ | 24,760 | ||||||||||
| Asset Quality | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||||||||||||||||
| Total loans held-for-investment | $ | 1,979,720 | $ | 1,906,992 | $ | 1,847,161 | $ | 1,764,846 | $ | 1,717,705 | ||||||||||
| Allowance for loan losses | $ | (26,591 | ) | $ | (24,693 | ) | $ | (24,476 | ) | $ | (23,789 | ) | $ | (22,588 | ) | |||||
| 30-89 day past due loans | $ | - | $ | - | $ | 1,470 | $ | 2,500 | $ | - | ||||||||||
| 90+ day past due loans | $ | 2,500 | $ | 3,530 | $ | 3,874 | $ | 1,374 | $ | 3,701 | ||||||||||
| Nonaccrual loans | $ | 2,500 | $ | 4,656 | $ | 5,053 | $ | 5,105 | $ | 3,354 | ||||||||||
| NPAs / Assets | 0.11 | % | 0.21 | % | 0.23 | % | 0.25 | % | 0.17 | % | ||||||||||
| NPLs / Total loans held-for-investment & OREO | 0.13 | % | 0.24 | % | 0.27 | % | 0.29 | % | 0.20 | % | ||||||||||
| Net quarterly charge-offs (recoveries) | $ | 96 | $ | 34 | $ | - | $ | (7 | ) | $ | (8,602 | ) | ||||||||
| Net charge-offs (recoveries) /avg loans (annualized) | 0.02 | % | 0.01 | % | 0.00 | % | 0.00 | % | (2.05 | )% | ||||||||||
| Allowance for loan losses to loans HFI | 1.34 | % | 1.29 | % | 1.33 | % | 1.35 | % | 1.32 | % | ||||||||||
| Allowance for loan losses to nonaccrual loans | 1,063.64 | % | 530.35 | % | 484.39 | % | 465.99 | % | 673.46 | % | ||||||||||
PRIVATE BANCORP OF AMERICA, INC.
(Unaudited)
The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: adjusted income before provision for income taxes, adjusted net income and adjusted EPS. 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.
| GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||||||||||||||||
| Adjusted income before provision for income taxes | ||||||||||||||||||||
| Income before provision for income taxes | $ | 11,110 | $ | 11,178 | $ | 11,205 | $ | 12,100 | $ | 22,109 | ||||||||||
| ANI recovery (1) | - | - | - | - | (7,708 | ) | ||||||||||||||
| Settlement of legal fees related to ANI litigation (2) | - | - | - | - | (1,635 | ) | ||||||||||||||
| Recovery of principal and interest on a loan acquired with credit deterioration as part of a business combination (3) | - | - | - | - | (986 | ) | ||||||||||||||
| Adjusted income before provision for income taxes (non-GAAP) | $ | 11,110 | $ | 11,178 | $ | 11,205 | $ | 12,100 | $ | 11,780 | ||||||||||
| Adjusted net income | ||||||||||||||||||||
| Net income | $ | 7,827 | $ | 7,884 | $ | 7,859 | $ | 8,489 | $ | 15,534 | ||||||||||
| ANI recovery, net of tax (1)(4) | - | - | - | - | (5,430 | ) | ||||||||||||||
| Settlement of legal fees related to ANI litigation, net of tax (2)(4) | - | - | - | - | (1,152 | ) | ||||||||||||||
| Recovery of principal and interest on a loan acquired with credit deterioration as part of a business combination, net of tax(3)(4) | - | - | - | - | (694 | ) | ||||||||||||||
| Adjusted net income (non-GAAP) | $ | 7,827 | $ | 7,884 | $ | 7,859 | $ | 8,489 | $ | 8,258 | ||||||||||
| Adjusted diluted earnings per share ("Adjusted EPS") | ||||||||||||||||||||
| Diluted earnings per share | $ | 1.35 | $ | 1.36 | $ | 1.36 | $ | 1.47 | $ | 2.69 | ||||||||||
| ANI recovery, net of tax (1)(4) | - | - | - | - | (0.94 | ) | ||||||||||||||
| Settlement of legal fees related to ANI litigation, net of tax (2)(4) | - | - | - | - | (0.20 | ) | ||||||||||||||
| Recovery of principal and interest on a loan previously acquired with credit deterioration as part of a business combination, net of tax(3)(4) | - | - | - | - | (0.12 | ) | ||||||||||||||
| Adjusted EPS (non-GAAP) | $ | 1.35 | $ | 1.36 | $ | 1.36 | $ | 1.47 | $ | 1.43 | ||||||||||
| Diluted average shares outstanding | 5,762,616 | 5,754,937 | 5,723,735 | 5,709,994 | 5,726,522 | |||||||||||||||
(1) In the second quarter of 2023, the Company reached a settlement with the Receiver for ANI Investments and Gina Champion-Cain in which the Company recovered $7.7 million (or approximately $0.94 per diluted share after tax) plus certain rights to future recoveries from a guarantor of the charged off loan. This recovery amount represents 80% of the original principal charge-off and is net of the participant bank's share.
(2) In the second quarter of 2023, in conjunction with the resolution of the ANI litigation, the Company was reimbursed $0.9 million of legal costs by the participant bank. In addition, $0.7 million of previously invoiced legal fees were waived at settlement of the litigation.
(3) In the second quarter of 2023, the Company received $1.0 million related to a loan that was originated and written off by San Diego Private Bank ("SDPB") prior to SDPB merging with the Company in 2013. Accordingly, the Company recorded an allowance recovery of $0.9 million for the amount that would have been written off at the time of the merger under CECL and $0.1 million of interest income for recovered interest.
(4) Net of tax effect of 29.6%, which is comprised of 21.0% for the statutory Federal tax rate plus 8.6% for state franchise taxes, net of Federal benefits.
PRIVATE BANCORP OF AMERICA, INC.
(Unaudited)
The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: adjusted income before provision for income taxes, adjusted net income and adjusted EPS. 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.
| GAAP to Non-GAAP Reconciliation | ||||||||
| (Dollars in thousands, except per share amounts) | ||||||||
| Year to Date | ||||||||
| Jun 30, 2024 | Jun 30, 2023 | |||||||
| Adjusted income before provision for income taxes | ||||||||
| Income before provision for income taxes | $ | 22,288 | $ | 34,112 | ||||
| ANI recovery (1) | - | (7,708 | ) | |||||
| Settlement of legal fees related to ANI litigation (2) | - | (1,635 | ) | |||||
| Recovery of principal and interest on a loan acquired with credit deterioration as part of a business combination (3) | - | (986 | ) | |||||
| Adjusted income before provision for income taxes (non-GAAP) | $ | 22,288 | $ | 23,783 | ||||
| Adjusted net income | ||||||||
| Net income | $ | 15,711 | $ | 24,508 | ||||
| ANI recovery, net of tax (1)(4) | - | (5,430 | ) | |||||
| Settlement of legal fees related to ANI litigation, net of tax (2)(4) | - | (1,152 | ) | |||||
| Recovery of principal and interest on a loan acquired with credit deterioration as part of a business combination, net of tax(3)(4) | - | (694 | ) | |||||
| Adjusted net income (non-GAAP) | $ | 15,711 | $ | 17,232 | ||||
| Adjusted diluted earnings per share ("Adjusted EPS") | ||||||||
| Diluted earnings per share | $ | 2.71 | $ | 4.25 | ||||
| ANI recovery, net of tax (1)(4) | - | (0.94 | ) | |||||
| Settlement of legal fees related to ANI litigation, net of tax (2)(4) | - | (0.20 | ) | |||||
| Recovery of principal and interest on a loan previously acquired with credit deterioration as part of a business combination, net of tax(3)(4) | - | (0.12 | ) | |||||
| Adjusted EPS (non-GAAP) | $ | 2.71 | $ | 2.99 | ||||
| Diluted average shares outstanding | 5,755,250 | 5,722,645 | ||||||
(1) In the second quarter of 2023, the Company reached a settlement with the Receiver for ANI Investments and Gina Champion-Cain in which the Company recovered $7.7 million (or approximately $0.94 per diluted share after tax) plus certain rights to future recoveries from a guarantor of the charged off loan. This recovery amount represents 80% of the original principal charge-off and is net of the participant bank's share.
(2) In the second quarter of 2023, in conjunction with the resolution of the ANI litigation, the Company was reimbursed $0.9 million of legal costs by the participant bank. In addition, $0.7 million of previously invoiced legal fees were waived at settlement of the litigation.
(3) In the second quarter of 2023, the Company received $1.0 million related to a loan that was originated and written off by San Diego Private Bank ("SDPB") prior to SDPB merging with the Company in 2013. Accordingly, the Company recorded an allowance recovery of $0.9 million for the amount that would have been written off at the time of the merger under CECL and $0.1 million of interest income for recovered interest.
(4) Net of tax effect of 29.6%, which is comprised of 21.0% for the statutory Federal tax rate plus 8.6% for state franchise taxes, net of Federal benefits.
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.
| GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||||||||||||||||
| Efficiency Ratio | ||||||||||||||||||||
| Noninterest expense | $ | 12,962 | $ | 12,783 | $ | 11,768 | $ | 11,843 | $ | 8,802 | ||||||||||
| Net interest income | 24,670 | 22,768 | 22,188 | 23,255 | 22,708 | |||||||||||||||
| Noninterest income | 1,538 | 1,426 | 1,244 | 1,159 | 1,054 | |||||||||||||||
| Total net interest income and noninterest income | 26,208 | 24,194 | 23,432 | 24,414 | 23,762 | |||||||||||||||
| Efficiency ratio (non-GAAP) | 49.46 | % | 52.84 | % | 50.22 | % | 48.51 | % | 37.04 | % | ||||||||||
| Adjusted Efficiency Ratio | ||||||||||||||||||||
| Noninterest expense | $ | 12,962 | $ | 12,783 | $ | 11,768 | $ | 11,843 | $ | 8,802 | ||||||||||
| Settlement of legal fees related to ANI litigation | - | - | - | - | 1,635 | |||||||||||||||
| Adjusted noninterest expense (non-GAAP) | 12,962 | 12,783 | 11,768 | 11,843 | 10,437 | |||||||||||||||
| Total net interest income and noninterest income | 26,208 | 24,194 | 23,432 | 24,414 | 23,762 | |||||||||||||||
| Recovery of interest on a loan acquired with credit deterioration as part of a business combination | - | - | - | - | (84 | ) | ||||||||||||||
| Adjusted total net interest income and noninterest income (non-GAAP) | 26,208 | 24,194 | 23,432 | 24,414 | 23,678 | |||||||||||||||
| Adjusted Efficiency ratio (non-GAAP) | 49.46 | % | 52.84 | % | 50.22 | % | 48.51 | % | 44.08 | % | ||||||||||
| Pretax pre-provision net revenue | ||||||||||||||||||||
| Net interest income | $ | 24,670 | $ | 22,768 | $ | 22,188 | $ | 23,255 | $ | 22,708 | ||||||||||
| Noninterest income | 1,538 | 1,426 | 1,244 | 1,159 | 1,054 | |||||||||||||||
| Total net interest income and noninterest income | 26,208 | 24,194 | 23,432 | 24,414 | 23,762 | |||||||||||||||
| Less: Noninterest expense | 12,962 | 12,783 | 11,768 | 11,843 | 8,802 | |||||||||||||||
| Pretax pre-provision net revenue (non-GAAP) | $ | 13,246 | $ | 11,411 | $ | 11,664 | $ | 12,571 | $ | 14,960 | ||||||||||
| Return and Adjusted Return on Average Assets, Average Equity, Average Tangible Equity | ||||||||||||||||||||
| Net income | $ | 7,827 | $ | 7,884 | $ | 7,859 | $ | 8,489 | $ | 15,534 | ||||||||||
| Adjusted net income (non-GAAP) (1) | 7,827 | 7,884 | 7,859 | 8,489 | 8,258 | |||||||||||||||
| Average assets | 2,241,860 | 2,148,978 | 2,062,486 | 2,005,197 | 1,959,802 | |||||||||||||||
| Average shareholders' equity | 199,088 | 190,326 | 180,287 | 173,347 | 162,173 | |||||||||||||||
| Less: Average intangible assets | 2,163 | 2,208 | 2,451 | 2,709 | 2,975 | |||||||||||||||
| Average tangible common equity (non-GAAP) | 196,925 | 188,118 | 177,836 | 170,638 | 159,198 | |||||||||||||||
| Return on average assets | 1.40 | % | 1.48 | % | 1.51 | % | 1.68 | % | 3.18 | % | ||||||||||
| Adjusted return on average assets (non-GAAP) (1) | 1.40 | % | 1.48 | % | 1.51 | % | 1.68 | % | 1.69 | % | ||||||||||
| Return on average equity | 15.81 | % | 16.66 | % | 17.29 | % | 19.43 | % | 38.42 | % | ||||||||||
| Adjusted return on average equity (non-GAAP) (1) | 15.81 | % | 16.66 | % | 17.29 | % | 19.43 | % | 20.42 | % | ||||||||||
| Return on average tangible common equity (non-GAAP) | 15.99 | % | 16.86 | % | 17.53 | % | 19.74 | % | 39.14 | % | ||||||||||
| Adjusted return on average tangible common equity (non-GAAP) (1) | 15.99 | % | 16.86 | % | 17.53 | % | 19.74 | % | 20.81 | % | ||||||||||
| Tangible book value per share | ||||||||||||||||||||
| Total equity | 201,442 | 194,032 | 185,783 | 174,679 | 167,211 | |||||||||||||||
| Less: Total intangible assets | 2,164 | 2,203 | 2,318 | 2,449 | 2,875 | |||||||||||||||
| Total tangible equity | 199,278 | 191,829 | 183,465 | 172,230 | 164,336 | |||||||||||||||
| Shares outstanding | 5,751,143 | 5,717,519 | 5,719,115 | 5,703,350 | 5,702,637 | |||||||||||||||
| Tangible book value per share (non-GAAP) | $ | 34.65 | $ | 33.55 | $ | 32.08 | $ | 30.20 | $ | 28.82 | ||||||||||
(1) A reconciliation of net income to adjusted net income is provided on page 13.
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.
| GAAP to Non-GAAP Reconciliation | ||||||||
| (Dollars in thousands) | ||||||||
| Year to Date | ||||||||
| Jun 30, 2024 | Jun 30, 2023 | |||||||
| Efficiency Ratio | ||||||||
| Noninterest expense | $ | 25,745 | $ | 20,359 | ||||
| Net interest income | 47,438 | 44,876 | ||||||
| Noninterest income | 2,964 | 2,519 | ||||||
| Total net interest income and noninterest income | 50,402 | 47,395 | ||||||
| Efficiency ratio (non-GAAP) | 51.08 | % | 42.96 | % | ||||
| Adjusted Efficiency Ratio | ||||||||
| Noninterest expense | $ | 25,745 | $ | 20,359 | ||||
| Settlement of legal fees related to ANI litigation | - | 1,635 | ||||||
| Adjusted noninterest expense (non-GAAP) | 25,745 | 21,994 | ||||||
| Total net interest income and noninterest income | 50,402 | 47,395 | ||||||
| Recovery of interest on a loan acquired with credit deterioration as part of a business combination | - | (84 | ) | |||||
| Adjusted total net interest income and noninterest income (non-GAAP) | 50,402 | 47,311 | ||||||
| Adjusted Efficiency ratio (non-GAAP) | 51.08 | % | 46.49 | % | ||||
| Pretax pre-provision net revenue | ||||||||
| Net interest income | $ | 47,438 | $ | 44,876 | ||||
| Noninterest income | 2,964 | 2,519 | ||||||
| Total net interest income and noninterest income | 50,402 | 47,395 | ||||||
| Less: Noninterest expense | 25,745 | 20,359 | ||||||
| Pretax pre-provision net revenue (non-GAAP) | $ | 24,657 | $ | 27,036 | ||||
| Return and Adjusted Return on Average Assets, Average Equity, Average Tangible Equity | ||||||||
| Net income | $ | 15,711 | $ | 24,508 | ||||
| Adjusted net income (non-GAAP) (1) | 15,711 | 17,232 | ||||||
| Average assets | 2,195,419 | 1,909,179 | ||||||
| Average shareholders' equity | 194,708 | 154,518 | ||||||
| Less: Average intangible assets | 2,185 | 2,973 | ||||||
| Average tangible common equity | 192,523 | 151,545 | ||||||
| Return on average assets | 1.44 | % | 2.59 | % | ||||
| Adjusted return on average assets (non-GAAP) (1) | 1.44 | % | 1.82 | % | ||||
| Return on average equity | 16.23 | % | 31.98 | % | ||||
| Adjusted return on average equity (non-GAAP) (1) | 16.23 | % | 22.49 | % | ||||
| Return on average tangible common equity (non-GAAP) | 16.41 | % | 32.61 | % | ||||
| Adjusted return on average tangible common equity (non-GAAP) (1) | 16.41 | % | 22.93 | % | ||||
(1) A reconciliation of net income to adjusted net income is provided on page 14.
