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Plaza Bank Reports Third Quarter 2016 Results

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SEATTLE--(BUSINESS WIRE)--

Plaza Bank (OTCBB: PZBW) reported net income of $229,000 for the third quarter of 2016. This compares to the $67,000 net income recognized in the previous quarter and is a significant improvement from the $242,000 loss recognized during the third quarter of 2015. As a result of improving credit quality, the current quarter results include a reverse provision for loan losses of $158,000. During the nine months ended September 30, 2016, the Bank recorded net income of $358,000 compared to a net loss of $738,000 for the same period a year ago.

"It has been an excellent first three quarters of 2016 for Plaza Bank. We've increased our bottom line substantially, grown our core deposit and loan portfolios and have made significant progress toward eliminating problem loans", said Donald L. Burton, Bank Chairman.

Highlights of the current quarter include:

  • Net income was $229,000, compared to a loss of $242,000 for the third quarter of 2015.
  • Compared to that same period a year ago, every aspect of the income statement was improved:
    • Net interest income before provision was $82,000, or 13.9% higher;
    • Net interest margin was 3.80%, compared to 3.29%;
    • Noninterest income was $33,000, or 89.2% higher;
    • Noninterest expense was $198,000, or 22.8% lower; and
    • Due to improved credit quality, the Bank recognized a $158,000 reverse provision.
  • Compared to December 31, 2015, aspects of our balance sheet improved as well:
    • Nonperforming asset to total asset ratio of 0.28%, compared to 1.89%;
    • Classified loans decreased to $3.4 million, compared to $8.9 million;
    • Core deposits increased $5.1 million, or 14.3%;
    • Noncore deposits decreased $16.0 million, or 62.3%; and
    • Capital increased $446,000, or 5.7%, to $8.3 million.

"We are on the right track and expect continued positive performance for the remainder of this year and into 2017," said Burton.

For more information regarding Plaza Bank, please contact Chief Financial Officer and Corporate Secretary Calyn Miller at (206) 436-7618, or cmiller@plazabankwa.com.

About Plaza Bank

Founded in 2006, Plaza Bank is a state chartered full-service commercial bank, headquartered in downtown Seattle. The bank serves closely held commercial businesses, professional firms, non-profit organizations and the people who make them successful. The company provides high quality commercial banking services tailored for the small business community of Puget Sound. For more information, visit www.PlazaBankWA.com.

Forward-Looking Statement Safe Harbor

This earnings release contains comments or information that constitute forward-looking statements and are based on current expectations that involve risks and uncertainties. Forward-looking statements may describe Plaza Bank's projections, estimates, plans and expectations of future performance and can be identified by words such as "believe," "expect", "intend," "estimate," "likely," "anticipate," and other similar expressions. These are not guarantees of future performance, and actual results may differ materially from the results expressed in these forward-looking statements—which due to their forward-looking nature—are difficult to predict. Investors should not place undue reliance on any forward-looking statement and should consider factors that might cause differences between actual performance and projected performance. Among other things, we face risks associated with: our ability to grow our loan and deposit franchises and capitalize on market opportunities; changes in interest rates; competition from traditional or nontraditional competitors; declines in real estate or related markets; increases in regional employment levels; decreases in general economic conditions that impact our business or our markets; actions by the Federal Reserve Bank which affect monetary and/or fiscal policy; regulatory or legislative actions that may increase capital requirements or otherwise limit our ability to do business; changes to the quality of the loan portfolio and our ability to succeed in problem-asset resolution efforts; our ability to maintain electronic and physical security of our customer data and our information systems; our ability to maintain compliance with applicable laws and regulations; our ability to attract and retain key personnel; changes in tax laws; and other risk factors. Plaza Bank undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of circumstances or events that may arise after the date of this release.

 
Balance Sheet
(in thousands)   Sep 30, 2016   Dec 31, 2015   Sep 30, 2015
    (Unaudited) (Audited) (Unaudited)
 
Cash $ 1,612 $ 6,436 $ 11,076
Investments 8,171 11,998 12,373
Loans
Total loans 57,504 54,060 52,949
Allowance for loan losses   (2,491 )   (2,760 )   (2,753 )
Net loans 55,013 51,300 50,196
 
Premises and equipment 71 75 82
Other real estate owned - 110 -
Other assets   574     739     777  
Total assets $ 65,441   $ 70,658   $ 74,504  
 
Deposits
Core deposits $ 40,929 $ 35,821 $ 37,599
Noncore deposits (1)   9,658     25,619     27,470  
Total deposits 50,587 61,440 65,069
 
Borrowed funds 6,137 1,137 1,137
Other liabilities 444 254 349
Capital   8,273     7,827     7,949  
Total liabilities and capital $ 65,441   $ 70,658   $ 74,504  
 

(1) Noncore deposits are comprised of brokered certificates, certificates obtained using a listing service and public deposits.

 
Key Ratios and Supplemental Information
(in thousands) Sep 30, 2016 Dec 31, 2015 Sep 30, 2015
(Unaudited) (Audited) (Unaudited)
 
Non-performing loans $ 181 $ 1,225 $ 1,348
Other real estate owned   -     110     -  
Total nonperforming assets $ 181   $ 1,335   $ 1,348  
 
Nonperforming assets to total assets 0.28 % 1.89 % 1.81 %
Allowance for loan losses to total loans 4.33 % 5.11 % 5.20 %
Non-performing loans to allowance 7.27 % 44.38 % 48.96 %
 
Equity to assets ratio 12.64 % 11.08 % 10.67 %
Tier 1 leverage ratio 11.73 % 10.69 % 10.98 %
Tier 1 risk-based capital ratio 13.55 % 13.91 % 15.59 %
 
       
Income Statement
(in thousands, unaudited) Three Months Ended Sep 30, Nine Months Ended Sep 30,
      2016     2015     2016     2015  
 
Interest income $ 773 $ 704 $ 2,232 $ 2,082
Interest expense   102     115     300     375  
Net interest income 671 589 1,932 1,707
 
Provision for loan losses   (158 )   -     (158 )   -  
Net interest income after prov 829 589 2,090 1,707
 
Noninterest income 70 37 609 244
 
Noninterest expense
Compensation and benefits 412 521 1,342 1,555
Premises and equipment 65 80 209 282
Data processing 97 91 300 287
Outside and professional services 24 41 189 225
Other operating expenses   72     135     301     340  
Total noninterest expense 670 868 2,341 2,689
 
Net income/(loss) before taxes 229 (242 ) 358 (738 )
Provision for income taxes   -     -     -     -  
Net income/(loss) after taxes $ 229   $ (242 ) $ 358   $ (738 )
 
Net interest margin 3.80 % 3.29 % 3.78 % 3.14 %
Return/(loss) on average assets 1.31 % -1.32 % 0.70 % -1.35 %

Plaza Bank
Calyn Miller, Chief Financial Officer and Corporate Secretary
206-436-7618
cmiller@plazabankwa.com.

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