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Pan Pacific Bank Announces Eight Consecutive Profitable Quarters

FREMONT, Calif., Feb. 11, 2014 /PRNewswire/ -- Pan Pacific Bank (OTCBB: PPFC) today announced its unaudited financial results for the quarter and year ended December 31, 2013, including total assets of $109.9 million, loans of $77.9 million, and deposits of $91.0 million. Chief Executive Officer Wayne Doiguchi commented, "Pan Pacific Bank is pleased to report net after-tax earnings of $99 thousand and $254 thousand for the three and twelve months ended December 31, 2013, respectively. The results for the quarter ended December 31, 2013 marks eight consecutive profitable quarters."

CEO Doiguchi added, "Everyone at the Bank has worked tirelessly this year to improve asset quality, lower the cost of funding liabilities, maintain valuable customer relationships and achieve positive earnings. With ample capital, a strong balance sheet, a formidable management team and renewed enthusiasm, the Bank is poised for growth."

The following are Bank highlights for 2013:

  • Completed the formation of the new Executive Management Team with experienced and qualified officers
  • Finalized a re-branding project that included a comprehensive re-engineering to the Bank's website
  • Improved already strong capital ratios with positive earnings and changes to risk based assets
  • Reduced non-performing assets by $1.3 million or 74.9% to $450 thousand
  • Maintained low loan losses; charged off loans, net of recoveries, of $113 thousand in 2013 or 0.14% as a percent of average loans
  • For Q4 2013, reduced the cost of interest bearing funds by 32bp compared to Q4 2012
  • For Q4 2013, improved the Net Interest Margin (NIM) by 28bp compared to Q4 2012

Net after-tax income for the three months ended December 31, 2013 was $99 thousand or $.020 per diluted share compared with net after-tax income of $331 thousand, or $.068 per diluted share for the same period in 2012. The primary reason for the $232 variance is a decrease of $406 thousand in non-interest income that in 2012 was driven by a gain of $417 thousand on sale of government guaranteed loans. Net after-tax income for the twelve months ended December 31, 2013, was $254 thousand or $.052 per diluted share compared with net after-tax income of $923 thousand, or $.203 per diluted share for the same period in 2012. For the twelve month period, the primary reason for the decrease in net after-tax income on a year over year basis was the absence in 2013 of any gain on sale of loans, net of incentive associated with the loan sales which amounted to approximately $901 thousand in 2012.

Total assets decreased $3.4 million, or 3.0%, to $109.9 million at December 31, 2013 compared with $113.3 million at December 31, 2012. On a linked quarter basis, total assets increased by $2.7 million or 2.5%. Total deposits, which are a significant driver of asset size, decreased $7.3 million, or 7.4%, to $91.0 million at December 31, 2013, compared with $98.3million at December 31, 2012. From year end 2012 to March 31, 2013, deposits declined to $89.7 million driven by disintermediation of funds into non-bank markets. Since March 31, 2013 through December 31, 2013, total deposits increased $1.3 million. During that same nine month period of time, non-interest bearing demand increased $4.4 million while interest bearing deposits decreased by $3.0 million. This decrease in interest bearing deposits, primarily due to reducing rates paid, contributed to a more favorable net interest margin. 

Gross loans decreased $4.4 million, or 5.3%, to $77.9 million at December 31, 2013, compared with $82.3 million at December 31, 2012.  The year over year decrease in gross loans was due primarily to normal principal payment reductions in the portfolio along with the reduction in non-performing loans. New loan origination and loan payoffs offset one another in the amount of approximately $16 million. Loan payoffs were impacted by borrowers reducing debt as the result of property sales and other injections of cash flow and to a lesser extent, reduced relationship balances caused by rate sensitivity. On a linked quarter basis, gross loans increased by $0.7 million or 0.9%.

Stockholders' equity increased $193 thousand, or 1.4%, to $14.5 million at December 31, 2013 compared with $14.3 million at December 31, 2012.  This increase was due to earnings of $254 thousand, $58 thousand in stock option related items, less $119 thousand net change in other comprehensive income. Tangible book value was $2.94 at December 31, 2013 and $2.92 at December 31, 2012.

Pan Pacific Bank

Pan Pacific Bank is focused on meeting the banking needs of business and individuals in Alameda and Santa Clara counties that are its primary service areas.  The Bank was founded July 2005 and is located at 47065 Warm Springs Blvd, Fremont, California.  The bank is an SBA / USDA lender and offers a variety of banking products to include loans, deposits, remote capture, and other cash management services.  For information concerning this press release please contact Wayne Doiguchi, CEO or Margaret A. Torres, CFO at 510 809 8888.
Our web address is www.panpacificbank.com.

Forward-Looking Statements

This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement.  Forward-looking statements are subject to risks and uncertainties.  Such risks and uncertainties may include, but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in our primary service area and more generally in California and other factors beyond the Bank's control.  Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated.  Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof.  Pan Pacific Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

For information concerning this press release,
please contact Wayne Doiguchi, CEO or
Margaret A. Torres, CFO at 510-809-8888.

 

December 31 Financial Data









The following summary presents unaudited selected consolidated financial

data as of and for the 12 months ended December 31, 2013 and 2012 

and income for the 4th quarter ending December 31, 2013 and 2012


















As of and For the Twelve Months


As of and For the Three Months


Ended Dec 31,


Ended Dec 31,

Income (Rounded to thousand)

2013


2012


2013


2012

















Interest income

$                  4,754


$             5,237


$               1,206


$             1,275

Interest expense

570


775


122


172

Net interest income

4,184


4,462


1,084


1,103

Provision for loan losses

-


128


-


-

Net interest income after provision for loan losses

4,184


4,334


1,084


1,103

Noninterest income

318


1,376


92


498

Noninterest expense

4,238


4,781


1,075


1,265

Income (loss) before income tax expense (benefit)

264


929


101


336

Income tax expense (benefit)

10


6


2


5

Net income (loss)

$                     254


$                923


$                    99


$                331









Per Share Data:








Net Income (loss) per common share:








     Basic

$                  0.052


$             0.203


$               0.020


$             0.068

     Diluted

0.051


0.203


0.020


0.068









Shares Outstanding 








     Basic

4,924,834


4,890,958


4,924,834


4,890,958

     Diluted

4,956,370


4,899,671


4,977,011


4,900,570

     Basic Weighted Average

4,904,941


4,548,975


4,924,834


4,890,958

     Diluted Weighted Average

4,936,476


4,557,688


4,977,011


4,900,570










As of and For the Twelve Months


As of and For the Nine Months


Ended Dec 31,


Ended Sep 30,

Selected Balance Sheet Data: (Rounded to thousand)

2013


2012


2013











Total assets

$              109,881


$         113,339


$           107,217



Investment securities

12,198


190


12,673











Gross loans (1)

77,904


82,272


77,242



Allowance for loan losses

(1,645)


(1,758)


(1,741)



Net loans

76,259


80,514


75,501











Deposits

91,022


98,338


92,411



Total borrowings

4,000


-





Shareholders' equity

14,480


14,287





Performance Ratios:








Return on average assets

0.24%


0.80%





Return on average shareholders' equity...

1.76%


6.96%





Net interest margin ...

4.11%


3.97%





Efficiency ratio (2)

94.14%


81.89%





Gross loans to deposit

85.59%


83.66%













Asset Quality: (Rounded to thousand)








Restructured loans

$                     379


$             1,348





Nonperforming loans

450


1,796





Other real estate owned

-


-





Total nonperforming assets

450


1,796





Allowance for loan losses: 








     Percentage of nonperforming loans

365.56%


97.88%





     Percentage of gross loans

2.11%


2.14%













Net charge offs (recoveries) to average gross loans

0.14%


0.10%





Capital Ratios: 








Bank: 








     Total risk-based capital ratio

18.18%


17.69%





     Tier 1 risk-based capital ratio

16.92%


16.43%





     Leverage ratio

13.55%


12.42%





     Average equity to average assets

13.57%


11.46%





















(1) Gross loans include net deferred loan fees and costs of $(49) and $(167) at December 31, 2013 and 2012, respectively









(2) The efficiency ratio is noninterest expense divided by the sum of net interest income and noninterest income

SOURCE Pan Pacific Bank

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