Private Bancorp of America, Inc. Announces Record Net Income and Earnings Per Share for Third Quarter 2024

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Private Bancorp of America (OTCQX: PBAM) reported record net income of $9.5 million for Q3 2024, up from $7.8 million in Q2 and $8.5 million in Q3 2023. Diluted EPS reached $1.63, compared to $1.35 in Q2 and $1.47 in Q3 2023. The company achieved a return on average assets of 1.62% and a return on average tangible common equity of 18.18%.

Key highlights include:

Loans held-for-investment increased 1.7% to $2.01 billion
Total deposits grew 5.3% to $2.11 billion
Net interest margin was 4.44%
Tangible book value per share rose to $36.87, up 6.4% quarter-over-quarter and 22.1% year-over-year

The bank maintained strong credit metrics with total criticized and classified loans at 1.23% of total loans. PBAM was recognized as the #1 bank for both ROA and ROE among banks with less than $5 billion in assets on The Best U.S. Banks 2024 list.

Positive

Record net income of $9.5 million for Q3 2024, up 21.8% from Q2
Diluted EPS increased to $1.63, up 20.7% from Q2
Return on average tangible common equity of 18.18%
Loans held-for-investment grew 1.7% quarter-over-quarter and 14.0% year-over-year
Total deposits increased 5.3% quarter-over-quarter and 19.1% year-over-year
Tangible book value per share rose 6.4% quarter-over-quarter and 22.1% year-over-year
Ranked #1 for ROA and ROE among banks with less than $5 billion in assets

Negative

Net interest margin decreased slightly to 4.44% from 4.48% in Q2
Increase in nonperforming assets to 0.48% of total assets from 0.11% in Q2
Classified assets increased to $14.9 million from $10.1 million in Q2

News Market Reaction

+4.79%

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+4.79% News Effect

On the day this news was published, PBAM gained 4.79%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

10/18/2024 - 05:00 AM

Third Quarter 2024 Highlights

Record net income for the third quarter of 2024 was $9.5 million, compared to $7.8 million in the prior quarter and $8.5 million in the third quarter of 2023. Net income for the third quarter of 2024 represents a return on average assets of 1.62% and a return on average tangible common equity of 18.18%
Diluted earnings per share for the third quarter of 2024 was $1.63, compared to $1.35 in the prior quarter and $1.47 in the third quarter of 2023
Loans held-for-investment (“HFI”) totaled $2.01 billion as of September 30, 2024, an increase of $32.7 million or 1.7% from June 30, 2024. Loans HFI increased 14.0% year over year
Total deposits were $2.11 billion as of September 30, 2024, an increase of $105.4 million or 5.3% from June 30, 2024. Total deposits increased 19.1% year over year. Core deposits were $1.87 billion as of September 30, 2024, an increase of $129.9 million or 7.4% from June 30, 2024. Core deposits increased 23.0% year over year
Federal Home Loan Bank advances decreased by $20.0 million as a result of strong deposit growth
Total cost of funding sources was 2.71% for the third quarter of 2024, a decrease from 2.78% in the prior quarter and an increase from 2.12% in the third quarter of 2023
Net interest margin was 4.44% for the third quarter of 2024, compared to 4.48% in the prior quarter and 4.67% in the third quarter of 2023
Provision for credit losses for the third quarter of 2024 was $0.3 million, compared to $2.1 million for the prior quarter and $0.5 million for the third quarter of 2023. The allowance for loan losses was 1.32% of loans HFI as of September 30, 2024
Credit metrics remained strong with total criticized and classified loans at $24.8 million, or 1.23% of total loans, up from $16.9 million, or 0.85% of total loans, in the prior quarter
Tangible book value per share was $36.87 as of September 30, 2024, an increase of $2.22 since June 30, 2024 primarily as a result of strong earnings. Tangible book value per share increased 6.4% quarter-over-quarter and 22.1% year over year.

LA JOLLA, Calif., Oct. 18, 2024 (GLOBE NEWSWIRE) -- Private Bancorp of America, Inc. (OTCQX: PBAM), (“Company”) and CalPrivate Bank (“Bank”) announced unaudited financial results for the third fiscal quarter ended September 30, 2024. The Company reported net income of $9.5 million, or $1.63 per diluted share, for the third quarter of 2024, compared to $7.8 million, or $1.35 per diluted share, in the prior quarter, and $8.5 million, or $1.47 per diluted share, in the third quarter of 2023.

Rick Sowers, President and CEO of the Company and the Bank stated, “For the third quarter we produced record net income and net interest income. We continued our strong momentum from the first half of the year and delivered Return on Equity of over 18% while Tangible Book Value is up over 22% year over year. The Company continued its strong growth in core deposits which yielded an increase of 19% year over year. The recent Fed rate cut allowed for an overall reduction in our cost of deposits while loan yields remain strong. We attribute this success to our Team and our Client centric Distinctly Different Service Model.”

Sowers added, “Our Team was proud to be recognized on The Best U.S. Banks 2024 list, sponsored by Crowe. The Bank ranked #1 for both Return on Assets (ROA) and Return on Equity (ROE) among banks with less than $5 billion in assets. This accolade highlights CalPrivate Bank’s dedication to excellence, innovation, and delivering Client-focused banking solutions. Additionally, our SBA Team was rated the #1 504 Lender in the US for 2024.”

“The Company continues to outperform financially through unparalleled client service. This quarter’s Bank Director’s Magazine, rated PBAM as the 10th Best Bank of any size in the country. The Bank continues to expand its customer base and grow existing client relationships, despite a challenging interest rate environment. Superior financial results have created the ability to grow the balance sheet, invest in exceptional people, innovation, and technology, including infrastructure, risk management systems, and new products, while still maintaining solid capital ratios. This has enhanced CalPrivate's franchise value,” said Selwyn Isakow, Chairman of the Board of the Company and the Bank.

STATEMENT OF INCOME

Net Interest Income

Net interest income for the third quarter of 2024 totaled $25.7 million, an increase of $1.0 million or 4.2% from the prior quarter and an increase of $2.5 million or 10.5% from the third quarter of 2023. The increase from the prior quarter was driven primarily by 3.9% growth in interest-earning assets as interest income increased by $1.4 million, partially offset by an 11 basis point decrease in asset yields. Interest income in the third quarter of 2024 was reduced by $0.3 million due to the reversal of interest income on a loan placed on nonaccrual status during the quarter, which decreased asset yields by 6 basis points. Additionally, interest income in the prior quarter included $0.6 million from nonaccrual interest recognized upon the payoff of a loan during that quarter, contributing 11 basis points to asset yields in the prior quarter. Partially offsetting the increase in interest income was an increase of $0.3 million in interest expense, which resulted from a 2.4% increase in average interest bearing-liabilities, partially offset by a 5 basis point decrease in the cost of interest-bearing liabilities.

Net Interest Margin

Net interest margin for the third quarter of 2024 was 4.44%, compared to 4.48% for the prior quarter and 4.67% in the third quarter of 2023. The 4 basis point decrease in net interest margin from the prior quarter was primarily due to lower yields on loans, including a 6 basis point impact from the reversal of interest income on a loan placed on nonaccrual status during the quarter. This was partially offset by a lower cost of total deposits. In addition, the prior quarter included 11 basis points from nonaccrual interest recognized upon the payoff of a loan during that quarter. The yield on earning assets was 6.91% for the third quarter of 2024 compared to 7.02% for the prior quarter, and the cost of interest-bearing liabilities was 3.73% for the third quarter of 2024 compared to 3.78% in the prior quarter. The cost of total deposits was 2.62% for the third quarter of 2024 compared to 2.67% in the prior quarter. The cost of core deposits, which excludes brokered deposits, was 2.27% in the third quarter of 2024 compared to 2.28% in the prior quarter. The spot rate for total deposits was 2.42% as of September 30, 2024, compared to 2.61% at June 30, 2024.

Provision for Credit Losses

Provision expense for credit losses for the third quarter of 2024 was $0.3 million, compared to $2.1 million in the prior quarter and $0.5 million in the third quarter of 2023. The provision expense for the current quarter was primarily driven by a $32.7 million increase in loans HFI and a $0.5 million increase in the specific reserve on a nonaccrual loan. These factors were largely offset by lower reserve rates on commercial real estate loans, mainly due to improvements in the real gross domestic product ("GDP") and commercial real estate ("CRE") price index growth forecasts used in our Current Expected Credit Losses ("CECL") model. For more details, please refer to the “Asset Quality” section below.

Noninterest Income

Noninterest income was $1.4 million for the third quarter of 2024, compared to $1.5 million in the prior quarter and $1.2 million in the third quarter of 2023. SBA loan sales for the third quarter of 2024 were $9.1 million with a 10.96% average trade premium resulting in a net gain on sale of $587 thousand, compared with $8.0 million with a 12.16% average trade premium resulting in a net gain on sale of $661 thousand in the prior quarter.

Noninterest Expense

Noninterest expense was $13.4 million for the third quarter of 2024, compared to $13.0 million in the prior quarter and $11.8 million in the third quarter of 2023. The efficiency ratio was 49.46% for the third quarter of 2024 compared to 49.46% in the prior quarter and 48.51% in the third quarter of 2023. The relatively unchanged efficiency ratio from the prior quarter reflects that noninterest expense increased proportionally to the increase in net interest income described above.

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 $4.0 million for the third quarter of 2024, compared to $3.3 million for the prior quarter. The effective tax rate for the third quarter of 2024 was 29.5%, compared to 29.5% in the prior quarter and 29.8% in the third quarter of 2023.

STATEMENT OF FINANCIAL CONDITION

As of September 30, 2024, total assets were $2.39 billion, an increase of $100.7 million since June 30, 2024. The increase in assets from the prior quarter was primarily due to higher cash balances, loans receivable, and investment securities. Total cash and due from banks was $207.2 million as of September 30, 2024, an increase of $48.8 million or 30.8%, since June 30, 2024, primarily due to strong core deposit growth. Loans HFI totaled $2.01 billion as of September 30, 2024, an increase of $32.7 million or 1.7% since June 30, 2024. Investment securities available-for-sale (“AFS”) were $141.1 million as of September 30, 2024, an increase of $19.4 million or 15.9% since June 30, 2024, primarily as a result of new securities purchased. As of September 30, 2024, the net unrealized loss on the AFS investment securities portfolio, which is comprised mostly of US Treasury and Government Agency debt, was $9.1 million (pre-tax) compared to a loss of $13.0 million (pre-tax) as of June 30, 2024. The average duration of the Bank’s AFS portfolio is 3.2 years. The Company has no held-to-maturity securities.

Total deposits were $2.11 billion as of September 30, 2024, an increase of $105.4 million since June 30, 2024. During the quarter, core deposits increased by $129.9 million, which was driven by a $102.6 million increase in interest-bearing core deposits (including balances in the Intrafi ICS and CDARS programs) and a $27.2 million increase in noninterest-bearing core deposits. The deposit mix has continued to shift as short-term interest rates, though still elevated, began to decline during the quarter. Noninterest-bearing deposits represent 31.2% of total core deposits. Uninsured deposits, net of collateralized and fiduciary deposit accounts, represent 47.8% of total deposits as of September 30, 2024.

As of September 30, 2024, total available liquidity was $1.9 billion or 191.2% of uninsured deposits, net of collateralized and fiduciary deposit accounts. Total available liquidity is comprised of $340 million of on-balance sheet liquidity (cash and investment securities) and $1.6 billion of unused borrowing capacity.

Asset Quality and Allowance for Credit Losses ("ACL")

As of September 30, 2024, the allowance for loan losses was $26.6 million or 1.32% of loans HFI, compared to $26.6 million or 1.34% of loans HFI as of June 30, 2024. The decrease in the coverage ratio from June 30, 2024 primarily reflects lower reserve rates on commercial real estate loans, mainly due to improvements in the real GDP and CRE price index growth forecasts used in our CECL model. The Company continues to have strong credit metrics and its nonperforming assets are 0.48% of total assets as of September 30, 2024 compared to 0.11% as of June 30, 2024. The increase in nonperforming assets was due to $9.0 million in commercial real estate loans related to a single borrower relationship that were placed on nonaccrual status during the quarter. These loans are secured by real estate collateral, with the current estimated fair value of collateral exceeding the outstanding loan amounts. Some of the loans also include partial SBA guarantees. The reserve for unfunded commitments was $2.2 million as of September 30, 2024, compared to $1.9 million as of June 30, 2024. Given the credit quality of the loan portfolio, management believes we are sufficiently reserved.

At September 30, 2024 and June 30, 2024, there were no doubtful credits and classified assets were $14.9 million and $10.1 million, respectively. Total classified assets consisted of eight loans as of September 30, 2024, which included seven loans totaling $12.4 million secured by real estate with a weighted average LTV of 45.0%. The remaining loan was a $2.5 million unsecured commercial and industrial loan on nonaccrual status with a specific reserve of $2.0 million.

Capital Ratios ⁽²⁾

The Bank’s capital ratios were in excess of the levels established for “well capitalized” institutions and are as follows:

	September 30, 2024 ⁽²⁾		June 30, 2024
CalPrivate Bank
Tier I leverage ratio	10.05	%	10.00	%
Tier I risk-based capital ratio	11.46	%	11.24	%
Total risk-based capital ratio	12.71	%	12.49	%

(2) September 30, 2024 capital ratios are preliminary and subject to change.

About Private Bancorp of America, Inc. (OTCQX: PBAM)

PBAM is the holding company for CalPrivate Bank, which operates offices in Coronado, San Diego, La Jolla, Newport Beach, El Segundo, and Beverly Hills, as well as through efficient digital banking services. CalPrivate Bank is driven by its core values of building client Relationships based on superior funding Solutions, unparalleled Service, and mutual Trust. The Bank caters to high-net-worth individuals, professionals, closely-held businesses, and real estate entrepreneurs, delivering a Distinctly Different™ personalized banking experience while leveraging cutting-edge technology to enhance our clients’ evolving needs. CalPrivate Bank is in the top tier of customer service survey ratings in the nation, scoring almost 3x higher than the median domestic bank. The Bank offers comprehensive deposit and treasury services, rapid and creative loan options including various portfolio and government-guaranteed lending programs, cross border banking, and innovative, unique technologies that drive enhanced client performance. CalPrivate Bank has been recognized by Bank Director's RankingBanking® as the 10^th best bank in the country and the #1 bank in its asset class for both return on assets (ROA) and return on equity (ROE). CalPrivate Bank was also ranked in the top 5% of banks in the U.S. with assets between $2B and $10B by American Banker. Additionally, CalPrivate Bank is a Bauer Financial 5-star rated bank, an SBA Preferred Lender, and has been honored as Community Bank 504 Lender of the Year by the NADCO Community Impact Awards, exemplifying excellence in the banking industry. These prestigious rankings highlight the Bank’s commitment to delivering exceptional banking services and setting new industry standards.

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, to permit investors to effectively analyze financial trends of our business activities, and to 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.

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 believe in good faith 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)
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023
Assets
Cash and due from banks	$	29,555		$	13,545		$	20,013
Interest-bearing deposits in other financial institutions		10,160			12,502			20,508
Interest-bearing deposits at Federal Reserve Bank		167,459			132,330			157,807
Total cash and due from banks		207,174			158,377			198,328
Interest-bearing time deposits with other institutions		4,124			4,097			1,500
Investment debt securities available for sale		141,100			121,725			86,648
Loans held for sale		2,040			-			4,071
Loans, net of deferred fees and costs and unaccreted discounts		2,012,457			1,979,720			1,764,846
Allowance for loan losses		(26,594	)		(26,591	)		(23,789	)
Loans held-for-investment, net of allowance		1,985,863			1,953,129			1,741,057
Federal Home Loan Bank stock, at cost		9,586			9,586			8,915
Right of use asset		4,344			4,719			2,827
Premises and equipment, net		2,345			2,207			1,447
Servicing assets, net		2,006			2,164			2,449
Accrued interest receivable		7,738			7,906			6,877
Other assets		20,053			21,774			20,100
Total assets	$	2,386,373		$	2,285,684		$	2,074,219

Liabilities and Shareholders' Equity
Liabilities
Noninterest bearing	$	584,292		$	557,055		$	595,023
Interest bearing		1,522,839			1,444,671			1,174,664
Total deposits		2,107,131			2,001,726			1,769,687
FHLB borrowings		28,000			48,000			82,000
Other borrowings		17,967			17,965			17,959
Accrued interest payable and other liabilities		19,062			16,551			29,894
Total liabilities		2,172,160			2,084,242			1,899,540

Shareholders' equity
Common stock		74,688			74,636			73,416
Additional paid-in capital		4,271			3,717			3,584
Retained earnings		141,623			132,179			108,757
Accumulated other comprehensive (loss) income, net		(6,369	)		(9,090	)		(11,078	)
Total shareholders' equity		214,213			201,442			174,679
Total liabilities and shareholders' equity	$	2,386,373		$	2,285,684		$	2,074,219

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
	Sep 30, 2024		Jun 30, 2024		Sep 30, 2023		Sep 30, 2024		Sep 30, 2023
Interest Income
Loans	$	36,353	$	35,538	$	30,568	$	104,897	$	85,066
Investment securities		1,345		1,090		562		3,414		1,702
Deposits in other financial institutions		2,320		2,034		1,748		6,153		4,831
Total interest income		40,018		38,662		32,878		114,464		91,599

Interest Expense
Deposits		13,468		13,040		8,210		38,638		19,715
Borrowings		843		952		1,413		2,681		3,753
Total interest expense		14,311		13,992		9,623		41,319		23,468

Net interest income		25,707		24,670		23,255		73,145		68,131
Provision (reversal) for credit losses		304		2,136		471		2,673		(6,605	)
Net interest income after provision for credit losses		25,403		22,534		22,784		70,472		74,736

Noninterest income:
Service charges on deposit accounts		504		430		313		1,322		971
Net gain on sale of loans		587		661		466		1,929		1,111
Other noninterest income		343		447		380		1,147		1,596
Total noninterest income		1,434		1,538		1,159		4,398		3,678

Noninterest expense:
Compensation and employee benefits		9,422		8,836		7,512		27,119		22,731
Occupancy and equipment		818		822		781		2,410		2,382
Data processing		1,238		1,183		1,064		3,479		2,886
Professional services		252		424		564		1,164		166
Other expenses		1,695		1,697		1,922		4,998		4,037
Total noninterest expense		13,425		12,962		11,843		39,170		32,202
Income before provision for income taxes		13,412		11,110		12,100		35,700		46,212
Provision for income taxes		3,959		3,283		3,611		10,536		13,215
Net income	$	9,453	$	7,827	$	8,489	$	25,164	$	32,997
Net income available to common shareholders	$	9,373	$	7,761	$	8,422	$	24,970	$	32,763

Earnings per share
Basic earnings per share	$	1.64	$	1.36	$	1.49	$	4.39	$	5.81
Diluted earnings per share	$	1.63	$	1.35	$	1.47	$	4.33	$	5.75

Average shares outstanding		5,707,723		5,702,938		5,658,340		5,693,972		5,640,764
Diluted average shares outstanding		5,767,401		5,762,616		5,709,994		5,761,087		5,697,911

PRIVATE BANCORP OF AMERICA, INC. Consolidated average balance sheet, interest, yield and rates (Unaudited) (Dollars in thousands)
	For the three months ended
	Sep 30, 2024							Jun 30, 2024							Sep 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	$	171,347	$	2,320		5.39	%	$	152,563	$	2,034		5.36	%	$	130,583	$	1,748		5.31	%
Investment securities		142,442		1,345		3.78	%		123,876		1,090		3.52	%		101,313		562		2.22	%
Loans, including LHFS		1,989,748		36,353		7.27	%		1,939,746		35,538		7.37	%		1,745,113		30,568		6.95	%
Total interest-earning assets		2,303,537		40,018		6.91	%		2,216,185		38,662		7.02	%		1,977,009		32,878		6.60	%
Noninterest-earning assets		24,862							25,675							28,188
Total Assets	$	2,328,399						$	2,241,860						$	2,005,197

Interest-Bearing Liabilities
Interest bearing DDA, excluding brokered		150,674		616		1.63	%		130,361		463		1.43	%		99,243		402		1.61	%
Savings & MMA, excluding brokered		891,697		7,745		3.46	%		845,856		7,354		3.50	%		657,453		4,248		2.56	%
Time deposits, excluding brokered		171,746		1,857		4.30	%		164,714		1,690		4.13	%		114,437		933		3.23	%
Total deposits, excluding brokered		1,214,117		10,218		3.35	%		1,140,931		9,507		3.35	%		871,133		5,583		2.54	%
Total brokered deposits		258,614		3,250		5.00	%		284,290		3,533		5.00	%		202,644		2,627		5.14	%
Total Interest-Bearing Deposits		1,472,731		13,468		3.64	%		1,425,221		13,040		3.68	%		1,073,777		8,210		3.03	%

FHLB advances		36,142		437		4.81	%		47,373		581		4.93	%		87,190		1,142		5.20	%
Other borrowings		17,966		406		8.99	%		17,966		371		8.31	%		17,958		271		5.99	%
Total Interest-Bearing Liabilities		1,526,839		14,311		3.73	%		1,490,560		13,992		3.78	%		1,178,925		9,623		3.24	%

Noninterest-bearing deposits		574,466							535,878							625,115
Total Funding Sources		2,101,305		14,311		2.71	%		2,026,438		13,992		2.78	%		1,804,040		9,623		2.12	%

Noninterest-bearing liabilities		18,205							16,334							27,810
Shareholders' equity		208,889							199,088							173,347

Total Liabilities and Shareholders' Equity	$	2,328,399						$	2,241,860						$	2,005,197

Net interest income/spread			$	25,707		4.20	%			$	24,670		4.24	%			$	23,255		4.48	%
Net interest margin						4.44	%						4.48	%						4.67	%

PRIVATE BANCORP OF AMERICA, INC. Consolidated average balance sheet, interest, yield and rates (Unaudited) (Dollars in thousands)
	Year to Date
	Sep 30, 2024							Sep 30, 2023
	Average Balance		Interest		Average Yield/Rate			Average Balance		Interest		Average Yield/Rate
Interest-Earnings Assets:
Deposits in other financial institutions	$	153,207	$	6,153		5.36	%	$	131,621	$	4,831		4.91	%
Investment securities		128,720		3,414		3.54	%		108,071		1,702		2.10	%
Loans		1,932,809		104,897		7.25	%		1,673,254		85,066		6.80	%
Total interest-earning assets		2,214,736		114,464		6.90	%		1,912,946		91,599		6.40	%
Noninterest-earning assets		25,334							28,581
Total Assets	$	2,240,070						$	1,941,527

Interest-Bearing Liabilities
Interest bearing DDA, excluding brokered		130,365		1,520		1.56	%		99,734		1,109		1.49	%
Savings & MMA, excluding brokered		834,650		21,520		3.44	%		640,803		10,196		2.13	%
Time deposits, excluding brokered		164,082		5,130		4.18	%		99,685		2,108		2.83	%
Total deposits, excluding brokered		1,129,097		28,170		3.33	%		840,222		13,413		2.13	%
Total brokered deposits		276,863		10,468		5.05	%		170,256		6,302		4.95	%
Total Interest-Bearing Deposits		1,405,960		38,638		3.67	%		1,010,478		19,715		2.61	%

FHLB advances		44,452		1,632		4.90	%		77,651		2,938		5.06	%
Other borrowings		17,965		1,049		7.80	%		17,969		815		6.06	%
Total Interest-Bearing Liabilities		1,468,377		41,319		3.76	%		1,106,098		23,468		2.84	%

Noninterest-bearing deposits		554,700							649,863
Total Funding Sources		2,023,077		41,319		2.73	%		1,755,961		23,468		1.79	%

Noninterest-bearing liabilities		17,522							24,718
Shareholders' equity		199,471							160,848

Total Liabilities and Shareholders' Equity	$	2,240,070						$	1,941,527

Net interest income/spread			$	73,145		4.17	%			$	68,131		4.61	%
Net interest margin						4.41	%						4.76	%

PRIVATE BANCORP OF AMERICA, INC. Condensed Balance Sheets (Unaudited) (Dollars in thousands, except per share amounts)
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Assets
Cash and due from banks	$	207,174		$	158,377		$	141,501		$	178,100		$	198,328
Interest-bearing time deposits with other institutions		4,124			4,097			4,032			4,000			1,500
Investment securities		141,100			121,725			114,067			102,499			86,648
Loans held for sale		2,040			-			383			1,233			4,071
Total loans held-for-investment		2,012,457			1,979,720			1,906,992			1,847,161			1,764,846
Allowance for loan losses		(26,594	)		(26,591	)		(24,693	)		(24,476	)		(23,789	)
Loans held-for-investment, net of allowance		1,985,863			1,953,129			1,882,299			1,822,685			1,741,057
Right of use asset		4,344			4,719			2,765			3,096			2,827
Premises and equipment, net		2,345			2,207			1,804			1,700			1,447
Other assets and interest receivable		39,383			41,430			40,926			39,155			38,341
Total assets	$	2,386,373		$	2,285,684		$	2,187,777		$	2,152,468		$	2,074,219

Liabilities and Shareholders' Equity
Liabilities
Noninterest Bearing	$	584,292		$	557,055		$	516,294		$	572,755		$	595,023
Interest Bearing		1,522,839			1,444,671			1,388,381			1,302,615			1,174,664
Total Deposits		2,107,131			2,001,726			1,904,675			1,875,370			1,769,687
Borrowings		45,967			65,965			70,963			74,961			99,959
Accrued interest payable and other liabilities		19,062			16,551			18,107			16,354			29,894
Total liabilities		2,172,160			2,084,242			1,993,745			1,966,685			1,899,540
Shareholders' equity
Common stock		74,688			74,636			74,105			74,003			73,416
Additional paid-in capital		4,271			3,717			4,108			3,679			3,584
Retained earnings		141,623			132,179			124,464			116,604			108,757
Accumulated other comprehensive (loss) income		(6,369	)		(9,090	)		(8,645	)		(8,503	)		(11,078	)
Total shareholders' equity		214,213			201,442			194,032			185,783			174,679
Total liabilities and shareholders' equity	$	2,386,373		$	2,285,684		$	2,187,777		$	2,152,468		$	2,074,219

Book value per common share	$	37.21		$	35.03		$	33.94		$	32.48		$	30.63
Tangible book value per common share ⁽¹⁾	$	36.87		$	34.65		$	33.55		$	32.08		$	30.20
Shares outstanding		5,756,207			5,751,143			5,717,519			5,719,115			5,703,350

(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
	Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023
Interest income	$	40,018	$	38,662	$	35,784	$	34,063	$	32,878
Interest expense		14,311		13,992		13,016		11,875		9,623
Net interest income		25,707		24,670		22,768		22,188		23,255
Provision for credit losses		304		2,136		233		459		471
Net interest income after provision for credit losses		25,403		22,534		22,535		21,729		22,784

Service charges on deposit accounts		504		430		388		373		313
Net gain on sale of loans		587		661		681		436		466
Other noninterest income		343		447		357		435		380
Total noninterest income		1,434		1,538		1,426		1,244		1,159

Compensation and employee benefits		9,422		8,836		8,861		7,942		7,512
Occupancy and equipment		818		822		770		790		781
Data processing		1,238		1,183		1,058		1,001		1,064
Professional services		252		424		488		410		564
Other expenses		1,695		1,697		1,606		1,625		1,922
Total noninterest expense		13,425		12,962		12,783		11,768		11,843

Income before provision for income taxes		13,412		11,110		11,178		11,205		12,100
Income taxes		3,959		3,283		3,294		3,346		3,611
Net income	$	9,453	$	7,827	$	7,884	$	7,859	$	8,489
Net income available to common shareholders	$	9,373	$	7,761	$	7,832	$	7,800	$	8,422

Earnings per share
Basic earnings per share	$	1.64	$	1.36	$	1.38	$	1.38	$	1.49
Diluted earnings per share	$	1.63	$	1.35	$	1.36	$	1.36	$	1.47

Average shares outstanding		5,707,723		5,702,938		5,679,843		5,664,028		5,658,340
Diluted average shares outstanding		5,767,401		5,762,616		5,754,937		5,723,735		5,709,994

	Performance Ratios
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
ROAA		1.62	%		1.40	%		1.48	%		1.51	%		1.68	%
ROAE		18.00	%		15.81	%		16.66	%		17.29	%		19.43	%
ROATCE ⁽¹⁾		18.18	%		15.99	%		16.86	%		17.53	%		19.74	%
Net interest margin		4.44	%		4.48	%		4.31	%		4.33	%		4.67	%
Net interest spread		4.20	%		4.24	%		4.08	%		4.11	%		4.48	%
Efficiency ratio ⁽¹⁾		49.46	%		49.46	%		52.84	%		50.22	%		48.51	%
Noninterest expense / average assets		2.29	%		2.32	%		2.39	%		2.26	%		2.34	%

(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
	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023
Total assets	$2,328,399	$2,241,860	$2,148,978	$2,062,486	$2,005,197
Earning assets	$2,303,537	$2,216,185	$2,123,509	$2,034,556	$1,977,009
Total loans, including loans held for sale	$1,989,748	$1,939,746	$1,868,308	$1,788,572	$1,745,113
Total deposits	$2,047,197	$1,961,099	$1,872,737	$1,788,659	$1,698,892
Total shareholders' equity	$208,889	$199,088	$190,326	$180,287	$173,347

	Loan Balances by Type
	(Dollars in thousands)
	Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023
Commercial Real Estate (CRE):
Investor owned	$	560,481	$	566,314	$	573,587	$	583,069	$	541,088
Owner occupied		221,364		216,876		216,123		202,106		185,296
Multifamily		175,387		177,390		175,629		168,324		159,700
Secured by single family		190,738		181,744		157,092		146,370		153,132
Land and construction		68,186		58,109		35,975		33,655		30,253
SBA secured by real estate		395,646		388,271		385,416		349,676		343,576
Total CRE		1,611,802		1,588,704		1,543,822		1,483,200		1,413,045
Commercial business:
Commercial and industrial		383,874		378,161		352,417		350,879		337,815
SBA non-real estate secured		15,101		10,758		8,657		9,807		11,081
Total commercial business		398,975		388,919		361,074		360,686		348,896
Consumer		1,680		2,097		2,096		3,275		2,905
Total loans held for investment	$	2,012,457	$	1,979,720	$	1,906,992	$	1,847,161	$	1,764,846

	Deposits by Type
	(Dollars in thousands)
	Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023
Noninterest-bearing DDA	$	584,292	$	557,055	$	516,294	$	572,755	$	595,023
Interest-bearing DDA, excluding brokered		182,268		156,253		117,129		121,829		108,508
Savings & MMA, excluding brokered		920,219		861,508		812,841		742,617		696,499
Time deposits, excluding brokered		186,583		168,664		160,605		147,583		122,622
Total deposits, excluding brokered		1,873,362		1,743,480		1,606,869		1,584,784		1,522,652
Total brokered deposits		233,769		258,246		297,806		290,586		247,035
Total deposits	$	2,107,131	$	2,001,726	$	1,904,675	$	1,875,370	$	1,769,687

PRIVATE BANCORP OF AMERICA, INC. (Unaudited)
	Rollforward of Allowance for Credit Losses
	(Dollars in thousands)
	For the three months ended
	Sep 30, 2024		Jun 30, 2024			Mar 31, 2024			Dec 31, 2023		Sep 30, 2023
Allowance for loan losses:
Beginning balance	$	26,591	$	24,693		$	24,476		$	23,789	$	22,588
Provision for loan losses		3		1,994			251			687		1,194
Net (charge-offs) recoveries		-		(96	)		(34	)		-		7
Ending balance		26,594		26,591			24,693			24,476		23,789
Reserve for unfunded commitments		2,165		1,865			1,723			1,741		1,969
Total allowance for credit losses	$	28,759	$	28,456		$	26,416		$	26,217	$	25,758

	Asset Quality
	(Dollars in thousands)
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Total loans held-for-investment	$	2,012,457		$	1,979,720		$	1,906,992		$	1,847,161		$	1,764,846
Allowance for loan losses	$	(26,594	)	$	(26,591	)	$	(24,693	)	$	(24,476	)	$	(23,789	)
30-89 day past due loans	$	-		$	-		$	-		$	1,470		$	2,500
90+ day past due loans	$	11,512		$	2,500		$	3,530		$	3,874		$	1,374
Nonaccrual loans	$	11,512		$	2,500		$	4,656		$	5,053		$	5,105
NPAs / Assets		0.48	%		0.11	%		0.21	%		0.23	%		0.25	%
NPLs / Total loans held-for-investment & OREO		0.57	%		0.13	%		0.24	%		0.27	%		0.29	%
Net quarterly charge-offs (recoveries)	$	-		$	96		$	34		$	-		$	(7	)
Net charge-offs (recoveries) /avg loans (annualized)		0.00	%		0.02	%		0.01	%		0.00	%		0.00	%
Allowance for loan losses to loans HFI		1.32	%		1.34	%		1.29	%		1.33	%		1.35	%
Allowance for loan losses to nonaccrual loans		231.01	%		1,063.64	%		530.35	%		484.39	%		465.99	%

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
	Sep 30, 2024		Sep 30, 2023
Adjusted income before provision for income taxes
Income before provision for income taxes	$	35,700	$	46,212
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)	$	35,700	$	35,883

Adjusted net income
Net income	$	25,164	$	32,997
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)	$	25,164	$	25,721

Adjusted diluted earnings per share ("Adjusted EPS")
Diluted earnings per share	$	4.33	$	5.75
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)	$	4.33	$	4.49

Diluted average shares outstanding		5,761,087		5,697,911

(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, pretax pre-provision net revenue, average tangible common equity, and 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
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Efficiency Ratio
Noninterest expense	$	13,425		$	12,962		$	12,783		$	11,768		$	11,843
Net interest income		25,707			24,670			22,768			22,188			23,255
Noninterest income		1,434			1,538			1,426			1,244			1,159
Total net interest income and noninterest income		27,141			26,208			24,194			23,432			24,414
Efficiency ratio (non-GAAP)		49.46	%		49.46	%		52.84	%		50.22	%		48.51	%

Pretax pre-provision net revenue
Net interest income	$	25,707		$	24,670		$	22,768		$	22,188		$	23,255
Noninterest income		1,434			1,538			1,426			1,244			1,159
Total net interest income and noninterest income		27,141			26,208			24,194			23,432			24,414
Less: Noninterest expense		13,425			12,962			12,783			11,768			11,843
Pretax pre-provision net revenue (non-GAAP)	$	13,716		$	13,246		$	11,411		$	11,664		$	12,571

Return and Adjusted Return on Average Assets, Average Equity, Average Tangible Equity
Net income	$	9,453		$	7,827		$	7,884		$	7,859		$	8,489
Average assets		2,328,399			2,241,860			2,148,978			2,062,486			2,005,197
Average shareholders' equity		208,889			199,088			190,326			180,287			173,347
Less: Average intangible assets		2,051			2,163			2,208			2,451			2,709
Average tangible common equity (non-GAAP)		206,838			196,925			188,118			177,836			170,638

Return on average assets		1.62	%		1.40	%		1.48	%		1.51	%		1.68	%
Return on average equity		18.00	%		15.81	%		16.66	%		17.29	%		19.43	%
Return on average tangible common equity (non-GAAP)		18.18	%		15.99	%		16.86	%		17.53	%		19.74	%

Tangible book value per share
Total equity		214,213			201,442			194,032			185,783			174,679
Less: Total intangible assets		2,006			2,164			2,203			2,318			2,449
Total tangible equity		212,207			199,278			191,829			183,465			172,230
Shares outstanding		5,756,207			5,751,143			5,717,519			5,719,115			5,703,350
Tangible book value per share (non-GAAP)	$	36.87		$	34.65		$	33.55		$	32.08		$	30.20

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
	Sep 30, 2024			Sep 30, 2023
Efficiency Ratio
Noninterest expense	$	39,170		$	32,202
Net interest income		73,145			68,131
Noninterest income		4,398			3,678
Total net interest income and noninterest income		77,543			71,809
Efficiency ratio (non-GAAP)		50.51	%		44.84	%

Adjusted Efficiency Ratio
Noninterest expense	$	39,170		$	32,202
Settlement of legal fees related to ANI litigation		-			1,635
Adjusted noninterest expense (non-GAAP)		39,170			33,837
Total net interest income and noninterest income		77,543			71,809
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)		77,543			71,725
Adjusted Efficiency ratio (non-GAAP)		50.51	%		47.18	%

Pretax pre-provision net revenue
Net interest income	$	73,145		$	68,131
Noninterest income		4,398			3,678
Total net interest income and noninterest income		77,543			71,809
Less: Noninterest expense		39,170			32,202
Pretax pre-provision net revenue (non-GAAP)	$	38,373		$	39,607

Return and Adjusted Return on Average Assets, Average Equity, Average Tangible Equity
Net income	$	25,164		$	32,997
Adjusted net income (non-GAAP) ⁽¹⁾		25,164			25,721
Average assets		2,240,070			1,941,527
Average shareholders' equity		199,471			160,848
Less: Average intangible assets		2,140			2,879
Average tangible common equity		197,331			157,969

Return on average assets		1.50	%		2.27	%
Adjusted return on average assets (non-GAAP) ⁽¹⁾		1.50	%		1.77	%
Return on average equity		16.85	%		27.43	%
Adjusted return on average equity (non-GAAP) ⁽¹⁾		16.85	%		21.38	%
Return on average tangible common equity (non-GAAP)		17.03	%		27.93	%
Adjusted return on average tangible common equity (non-GAAP) ⁽¹⁾		17.03	%		21.77	%

(1) A reconciliation of net income to adjusted net income is provided on page 13.

FAQ

What was Private Bancorp of America's (PBAM) net income for Q3 2024?

Private Bancorp of America (PBAM) reported a record net income of $9.5 million for Q3 2024.

How much did PBAM's diluted earnings per share (EPS) increase in Q3 2024?

PBAM's diluted earnings per share (EPS) increased to $1.63 in Q3 2024, up from $1.35 in Q2 2024 and $1.47 in Q3 2023.

What was PBAM's return on average tangible common equity for Q3 2024?

PBAM's return on average tangible common equity was 18.18% for Q3 2024.

How much did PBAM's total deposits grow in Q3 2024?

PBAM's total deposits grew by 5.3% quarter-over-quarter to $2.11 billion in Q3 2024, representing a 19.1% increase year-over-year.

What recognition did PBAM receive in The Best U.S. Banks 2024 list?

PBAM was ranked #1 for both Return on Assets (ROA) and Return on Equity (ROE) among banks with less than $5 billion in assets on The Best U.S. Banks 2024 list.

Private Bancorp of America, Inc. Announces Record Net Income and Earnings Per Share for Third Quarter 2024