Private Bancorp of America, Inc. Announces Second Quarter 2022 Financial Results

Rhea-AI Summary

Private Bancorp of America (PBAM) reported second-quarter net income of $4.4 million, a 2.4% increase year-over-year, with diluted EPS of $0.77, up 2.7%. Total loans reached $1.4 billion, marking a year-over-year growth of 30.6%. Non-interest demand deposits rose 23.7% to $747 million. The net interest margin improved to 4.57%. However, non-interest income decreased significantly by $1.7 million, largely due to lower SBA loan sales. Total non-interest expense increased 16% to $12.6 million, driven by higher professional services and inflationary pressures.

Positive

• Net income of $4.4 million, up 2.4% year-over-year.
• Diluted EPS of $0.77, a 2.7% increase.
• Total loans reached $1.4 billion, up 30.6% year-over-year.
• Non-interest demand deposits grew 23.7% to $747 million.
• Net interest margin improved to 4.57%.

Negative

• Non-interest income decreased by $1.7 million, primarily due to lower SBA loan sales.
• Non-interest expense rose 16% to $12.6 million, reflecting inflation and increased professional service costs.

Second Quarter Highlights

• Net income for the quarter was $4.4 million, up 2.4% from the same period in the prior year
• Diluted earnings per share of $0.77, up 2.7% from the same period in the prior year
• Total loans held-for-investment (“HFI”), excluding Paycheck Protection Program (“PPP”) loans, reached $1.4 billion, an increase of $322.9 million or 30.6% year-over-year and $100.8 million or 7.9% over Q1’22
• Non-interest-bearing demand deposits grew $143.0 million or 23.7% year over year and $22.5 million from the prior quarter to $747.0 million, representing 51.9% of total deposits
• Net interest margin (ex-PPP loans) of 4.57% compared to 4.14% for Q1’21 and compared to 4.51% for Q1’22
• Cost of funding sources remained low at 0.20%
• The provision for loan losses for the second quarter of 2022 was $659 thousand, an increase of $517 thousand compared to the first quarter of 2022
• Allowance for Loan Losses was 1.29% of total loans HFI (ex-PPP loans)
• Tangible book value per share of $22.68, down $0.12 from Q1’22 related to a mark-to-market adjustment on the securities portfolio
• Private Bancorp of America, Inc. (“PBAM”) well capitalized Tier 1 risk-based capital ratio of 9.51% (preliminary)

LA JOLLA, Calif., July 21, 2022 (GLOBE NEWSWIRE) -- Private Bancorp of America, Inc. (OTCQX:PBAM), (“Company”) and CalPrivate Bank (“Bank”) announced unaudited financial results for the second quarter ending June 30, 2022. The Company reported net income of $4.4 million, or $0.77 per diluted share, for the second quarter of 2022 compared to $6.5 million, or $1.13 per diluted share for the first quarter of 2022.

Rick Sowers, President and CEO of the Company and the Bank stated, “CalPrivate’s core franchise continued to organically grow loans and deposits which drove solid growth in net interest income to $18.0 million – our highest level yet. However, given the volatility of the interest rate and credit markets, we experienced a decline in our SBA 7(a) loan sales and the resulting gain on sale income for the quarter.”

Sowers continued, “While global events and the rapidly changing environment have put pressure on the overall financial markets and on our own financial results, our model of providing a concierge experience through our dedicated Teams and our core mission of providing Relationships, Solutions, and Trust continues to resonate and provide a stabilizing force to our Clients. We have been able to organically grow net loans (ex-PPP loans) more than $100 million in Q2’22, representing linked-quarter growth of 7.9%.

While the Federal Reserve raised overnight borrowing costs substantially in the second quarter, given our deep Client Relationships and strong referral network, the Bank was able to grow non-interest bearing deposits by $22.5 million while keeping the overall cost of interest bearing deposits low at 0.25%.”

Domestic events, including high inflation, have unfavorably resulted in increased non-interest expense, including employee compensation and professional services. The decline in SBA gain on sale was both a result of lower 7(a) loan volumes and a softer secondary market, which led to an increased efficiency ratio of 64.9% from 53.6% for Q1’22. While the industry faces significant headwinds, including an increased possibility of a recession, our Bank continues to invest in the infrastructure to become more efficient and to support the growth of our Relationship Teams committed to serving our Clients.

As a continuation of the Company’s investments in innovation to support long-term growth and efficiency, during the second quarter, the Company made additional FinTech investments in BankTech Ventures and the Banktech Consortium Fund, two leading investment management firms focused on providing capital to companies driving innovation in the banking industry and keeping the Company in front of emerging trends.

“The financial earnings power of PBAM remains resilient based on the first half results of 2022. The Company’s ability to organically grow loans attests to the Company’s successful strategy to stay focused on providing a Distinctly Different service. Diluted EPS for the first half of 2022 of $1.91 is up 22.4% from the same period a year ago,” said Selwyn Isakow, Chairman of the Board of the Company and the Bank.

Isakow added, “We are proud of CalPrivate’s achievements and financial performance to date, however, we remain cautious on the overall macro-economy. We must remain vigilant in our credit and risk management practices as we continue to evaluate the possibility of a near-term global recession due to significant geopolitical and economic challenges stemming from high inflation, energy supply constraints, volatile global politics, and the on-going war in Ukraine.”

STATEMENT OF INCOME

Net Interest Income

Net interest income for the second quarter totaled $18.0 million, representing an increase of $842 thousand or 4.9% compared to the first quarter of 2022. The increase in net interest income for the second quarter was primarily due to increases in organic non-PPP loan balances and higher rates. PPP interest and fee income was $224 thousand in Q2’22, compared to $751 thousand in Q1’22. As of June 30, 2022, only 12 PPP loans with total balances of $2.7 million remained unforgiven by the SBA. Interest expense on deposits increased $83 thousand in Q2’22 vs Q1’22 due to higher deposit totals and an increase in the deposit rates paid to Clients.

Net Interest Margin

The net interest margin for Q2’22 was 4.61% compared to 4.65% for the first quarter of 2022. Excluding PPP-loans, the net interest margin for Q2’22 was 4.57% compared to 4.51% for the first quarter of 2022. The 0.04% decrease in the as reported net interest margin for the second quarter was due to lower loan prepayments and higher cost of deposits. Average portfolio loan yields were 5.37% for Q2’22, compared to 5.51% for Q1’22, including loan prepayment fees. The yield on earning assets for the second quarter was 4.80% for Q2’22 compared with 4.82% for Q1’22 and the cost of funds was 0.20% for Q2’22 compared to 0.19% for Q1’22.

Provision for Loan Losses

The provision for loan losses for the second quarter was $659 thousand, an increase of $517 thousand compared to the first quarter of 2022. While the economy continued to recover in the second quarter, geopolitical events and high inflation have created uncertainty, and this is reflected in our ALLL to total loans HFI (ex-PPP loans) of 1.29%.

Non-Interest Income

Non-interest income was $1.4 million for the second quarter, representing a $1.7 million decrease, compared to the first quarter of 2022. The decrease in non-interest income was primarily due to a decrease in SBA loans sales during second quarter compared to the first quarter of 2022. SBA loan sales for the second quarter were $9.9 million with a 10.5% average trade premium resulting in a net gain on sale of $768 thousand, compared with $26.2 million with a 12.9% average trade premium resulting in a net gain on sale of $2.5 million in the first quarter of 2022.

Non-Interest Expense

Non-interest expense was $12.6 million for the second quarter representing a $1.7 million, or 16.0% increase compared to the first quarter of 2022. Much of the increase was related to the elevated levels of professional services and other expenses given an active and on-going lawsuit for the recovery of the charged-off loan related to the ANI Development, LLC/Gina Champion-Cain fraud case and Chicago Title (parent company, Fidelity National Financial) for their alleged involvement with the fraud scheme.

Additionally, the Company remains committed to making investments in the business, including technology, marketing, and staffing. Historically high inflation and low unemployment has resulted in pressure on wages as well as increased costs related to third party service providers. Related to the strong organic loan growth in the second quarter, the Company also increased its reserve for unfunded commitments by $214 thousand.

STATEMENT OF FINANCIAL CONDITION

Balance Sheet

At June 30, 2022, the Company reported total assets of $1.6 billion representing an increase of $66.6 million or 4.3% compared to the first quarter of 2022. The increase in assets for the second quarter was due to increases in loans supported by growth in core deposits. Total loans HFI increased to $1.4 billion at June 30, 2022 or $94.7 million during the quarter, up 7.4%; excluding PPP loans, total loans increased $100.8 million, up 7.9%. Total deposits were $1.4 billion representing an increase of $69.6 million, or 5.1%, compared to the first quarter. Total non-interest-bearing deposits represented 51.9% of total deposits at June 30, 2022. Additionally, during the quarter, the mark-to-market fair value net loss on the securities portfolio, which consisted mainly of US Treasury and Government Agency debt, increased to -$12.5 million from -$5.6 million from the prior quarter.

Asset Quality and Loan Deferrals

The Allowance for Loan Losses increased $659 thousand to $17.8 million in the quarter with a resulting coverage ratio of 1.29% of total loans HFI, excluding PPP loans. The increase in the Allowance for Loan Losses was primarily due to non-PPP organic loan growth and qualitative loss factors related to the general economic outlook in the markets we serve.

As of June 30, 2022, there were no doubtful credits or charge offs and Classified assets remained at $11.2 million, compared Q1’22. Total classified assets consisted of 10 loans, of which 6 loans totaling $7.9 million were secured by real estate with a weighted average LTV of 45.4%. In addition, all loans that were previously granted payment deferrals related to COVID-19 have resumed their contractual payments.

Capital Ratios ₍₁₎

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

	Jun 30, 2022 (1)	Mar 31, 2022	Dec 31, 2021
Private Bancorp of America
Tier I leverage ratio	8.61%	8.85%	8.42%
Tier I risk-based capital ratio	9.51%	10.31%	10.63%
Total risk-based capital ratio	12.01%	12.94%	13.38%
CalPrivate Bank
Tier I leverage ratio	9.58%	9.72%	9.29%
Tier I risk-based capital ratio	10.57%	11.93%	11.73%
Total risk-based capital ratio	11.82%	13.18%	12.98%

(1)   June 30, 2022, capital ratios are preliminary

Stock Repurchase Program

During the second quarter of 2022, PBAM announced that it had completed its stock repurchase program on April 28, 2022 through the repurchase of 60,000 shares.

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.

Investor Relations Contacts

Rick Sowers
President and Chief Executive Officer
Private Bancorp of America, Inc., and CalPrivate Bank
(424) 303-4894

Mag Wangsuwana
Executive Vice President and Chief Financial Officer
Private Bancorp of America, Inc., and CalPrivate Bank
(424) 348-2145

Safe Harbor Paragraph

This press release includes forward-looking statements that involve inherent risks and uncertainties. Private Bancorp of America, Inc. cautions readers that a number of important factors could cause actual results to differ materially from those in the forward‐looking statements. These factors include the effects of the COVID-19 pandemic and related government actions on the Bank and its customers, loan losses, economic conditions and competition in the geographic and business areas in which Private Bancorp of America, Inc. operates, our ability to successfully integrate and develop business through the addition of new personnel and facilities and merged banks, whether our efforts to expand loan, product and service offerings will prove profitable, the effects of the bank mergers and acquisitions in our markets, system failures and internet security, 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.

PRIVATE BANCORP OF AMERICA, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in thousands)
	June 30, 2022				March 31, 2022				Dollar change			Percentage change			June 30, 2021				Dollar change			Percentage change
Assets
Cash and due from banks	$	15,694			$	17,099			$	(1,405	)	-8.2	%		$	12,783			$	2,911		22.8	%
Interest-bearing deposits in other financial institutions		43,857				40,878				2,979		7.3	%			13,969				29,888		214.0	%
Interest-bearing deposits at Federal Reserve Bank		29,241				66,038				(36,797	)	-55.7	%			65,356				(36,115	)	-55.3	%
Total cash and due from banks		88,792				124,015				(35,223	)	28.4	%			92,108				(3,316	)	-3.6	%
Interest-bearing time deposits with other institutions		6,157				5,817				340		5.8	%			5,760				397		6.9	%
Investment securities available for sale		113,565				114,382				(817	)	-0.7	%			88,755				24,810		28.0	%
Loan held for sale		4,460				1,999				2,461		123.1	%			19,625				(15,165	)	-77.3	%
Total loans held-for-investment		1,379,519				1,284,838				94,681		7.4	%			1,164,611				214,908		18.5	%
Allowance for loan losses		(17,776	)			(17,117	)			(659	)	3.8	%			(15,708	)			(2,068	)	13.2	%
Net loans		1,361,743				1,267,721				94,022		7.4	%			1,148,903				212,840		18.5	%
Federal Home Loan Bank stock, at cost		7,020				4,909				2,111		43.0	%			4,909				2,111		43.0	%
Right of use asset		3,037				3,400				(363	)	-10.7	%			5,185				(2,148	)	-41.4	%
Premises and equipment, net		2,640				2,813				(173	)	-6.2	%			2,578				62		2.4	%
Servicing assets, net		3,515				3,525				(10	)	-0.3	%			2,123				1,392		65.6	%
Deferred tax asset		9,229				7,032				2,197		31.2	%			7,012				2,217		31.6	%
Accrued interest receivable		3,855				3,453				402		11.6	%			3,501				354		10.1	%
Other assets		8,089				6,416				1,673		26.1	%			2,311				5,778		250.0	%
Total assets	$	1,612,102			$	1,545,482			$	66,620		4.3	%		$	1,382,770			$	229,332		16.6	%
Liabilities and Shareholders’ Equity
Liabilities
Noninterest bearing	$	747,006			$	724,469			$	22,537		3.1	%		$	603,914			$	143,092		23.7	%
Interest Bearing		693,646				646,545				47,101		7.3	%			601,530				92,116		15.3	%
Total deposits		1,440,652				1,371,014				69,638		5.1	%			1,205,444				235,208		19.5	%
FHLB borrowings		10,000				10,000				-		0.0	%			30,000				(20,000	)	-66.7	%
Other borrowings		17,950				17,948				2		0.0	%			17,943				7		0.0	%
Accrued interest payable and other liabilities		13,305				14,630				(1,325	)	-9.1	%			13,059				246		1.9	%
Total liabilities		1,481,907				1,413,592				68,315		4.8	%			1,266,446				215,461		17.0	%
Shareholders’ equity
Common stock		71,516				70,899				617		0.9	%			70,405				1,111		1.6	%
Additional paid-in capital		3,368				3,602				(234	)	-6.5	%			3,179				189		5.9	%
Retained earnings		64,036				61,424				2,612		4.3	%			42,810				21,226		49.6	%
Accumulated other comprehensive (loss) income		(8,725	)			(4,035	)			(4,690	)	116.2	%			(70	)			(8,655	)	12364.3	%
Total stockholders’ equity		130,195				131,890				(1,695	)	-1.3	%			116,324				13,871		11.9	%
Total liabilities and stockholders’ equity	$	1,612,102			$	1,545,482			$	66,620		4.3	%		$	1,382,770			$	229,332		16.6	%

PRIVATE BANCORP OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
		For the three months ended
		June 30, 2022			March 31, 2022			Dollar change			Percentage change			June 30, 2021			Dollar change			Percentage change
Interest Income
Loans		$	17,931		$	17,246		$	685		4.0	%		$	14,637		$	3,294		22.5	%
Investment securities			571			401			170		42.4	%			351			220		62.7	%
Deposits in other financial institutions			204			134			70		52.2	%			40			164		410.0	%
Total interest income			18,706			17,781			925		5.2	%			15,028			3,678		24.5	%
Interest Expense
Deposits			410			327			83		25.4	%			409			1		0.2	%
Borrowings			313			313			-		0.0	%			1,020			(707	)	-69.3	%
Total interest expense			723			640			83		13.0	%			1,429			(706	)	-49.4	%
Net interest income			17,983			17,141			842		4.9	%			13,599			4,384		32.2	%
Provision for loan losses			659			142			517		364.1	%			1,146			(487	)	-42.5	%
Net interest income after provision for loan losses			17,324			16,999			325		1.9	%			12,453			4,871		39.1	%
Noninterest income:
Service charges on deposit accounts			299			281			18		6.4	%			224			57		29.4	%
Net gain on sale of loans			768			2,471			(1,703	)	-68.9	%			1,476			995		-67.0	%
Other noninterest income			375			357			18		5.0	%			171			186		51.2	%
Total noninterest income			1,442			3,109			(1,667	)	-53.6	%			1,871			1,238		-48.6	%
Noninterest expense:
Salary and employee benefits			7,374			7,313			61		0.8	%			5,966			1,408		23.6	%
Occupancy and equipment			808			723			85		11.8	%			820			(12	)	-1.5	%
Data processing			824			653			171		26.2	%			690			134		19.4	%
Professional services			1,835			915			920		100.5	%			791			1,044		132.0	%
Other expenses			1,759			1,255			504		40.2	%			891			868		97.4	%
Total noninterest expense			12,600			10,859			1,741		16.0	%			9,158			3,442		37.6	%
Income before provision for income taxes			6,166			9,249			(3,083	)	-33.3	%			6,100			66		1.1	%
Provision for income taxes			1,769			2,747			(978	)	-35.6	%			1,806			(37	)	-2.0	%
Net income		$	4,397		$	6,502		$	(2,105	)	-32.4	%		$	4,294		$	103		2.4	%
Net income available to common shareholders		$	4,347		$	6,432		$	(2,085	)	-32.4	%		$	4,231		$	116		2.7	%
Earnings per share
Basic earnings per share		$	0.78		$	1.16		$	(0.37	)	-32.1	%		$	0.76		$	0.02		3.2	%
Diluted earnings per share		$	0.77		$	1.13		$	(0.36	)	-32.0	%		$	0.75		$	0.02		2.8	%
Average shares outstanding			5,543,065			5,568,400			(25,335	)	-0.5	%			5,536,111			6,954		0.1	%
Diluted average shares outstanding			5,639,282			5,672,701			(33,419	)	-0.6	%			5,622,075			17,207		0.3	%

PRIVATE BANCORP OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
		June 30, 2022			June 30, 2021			Dollar change			Percentage change
Interest Income
Loans		$	35,177		$	28,796		$	6,381		22.2	%
Investment securities			972			656			316		48.2	%
Deposits in other financial institutions			339			99			240		242.4	%
Total interest income			36,488			29,551			6,937		23.5	%
Interest Expense
Deposits			737			926			(189	)	-20.4	%
Borrowings			626			2,239			(1,613	)	-72.0	%
Total interest expense			1,363			3,165			(1,802	)	-56.9	%
Net interest income			35,125			26,386			8,739		33.1	%
Provision for loan losses			802			1,446			(644	)	-44.5	%
Net interest income after provision for loan losses			34,323			24,940			9,383		37.6	%
Noninterest income:
Service charges on deposit accounts			580			454			126		27.8	%
Net gain on sale of loans			3,239			3,802			(563	)	-14.8	%
Gain on sale of investment securities			-			-			-		N/A
Other noninterest income			732			420			312		74.3	%
Total noninterest income			4,551			4,676			(125	)	-2.7	%
Noninterest expense:
Salary and employee benefits			14,687			10,881			3,806		35.0	%
Occupancy and equipment			1,531			1,630			(99	)	-6.1	%
Data processing			1,476			1,326			150		11.3	%
Professional services			2,750			1,441			1,309		90.8	%
Other expenses			2,998			1,654			1,344		81.3	%
Total noninterest expense			23,442			16,932			6,510		38.4	%
Income before provision for income taxes			15,432			12,684			2,748		21.7	%
Provision for income tax			4,517			3,784			733		19.4	%
Net income		$	10,915		$	8,900		$	2,015		22.6	%
Net income available to common shareholders		$	10,794		$	8,761		$	2,033		23.2	%
Earnings per share
Basic earnings per share		$	1.94		$	1.59		$	0.35		22.0	%
Diluted earnings per share		$	1.91		$	1.56		$	0.35		22.4	%
Average shares outstanding			5,555,662			5,525,557			30,105		0.5	%
Diluted average shares outstanding			5,652,071			5,601,705			50,366		0.9	%

		PRIVATE BANCORP OF AMERICA, INC.
		Consolidated average balance sheet, interest, yield and rates
		(Unaudited)
		(Dollars in thousands)
		For the three months ended
		June 30, 2022									March 31, 2022									June 30, 2021
		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		$	100,017		$	205		0.82	%		$	116,903		$	134		0.46	%		$	137,902		$	40		0.12	%
Investment securities			125,550			571		1.82	%			109,252			401		1.47	%			88,132			351		1.59	%
Loans			1,339,095			17,931		5.37	%			1,268,695			17,246		5.51	%			1,125,958			14,637		5.21	%
Total interest-earning assets			1,564,662			18,707		4.80	%			1,494,850			17,781		4.82	%			1,351,992			15,028		4.46	%
Noninterest-earning assets			27,614									21,502									18,217
Total Assets		$	1,592,276								$	1,516,352								$	1,370,209
Interest-Bearing Liabilities
Interest-bearing transaction accounts		$	87,682		$	54		0.25	%		$	78,557		$	16		0.08	%		$	65,283		$	12		0.07	%
Money market			492,838			241		0.20	%			498,146			192		0.16	%			424,371			231		0.22	%
Savings deposits			14,216			3		0.01	%			13,523			3		0.09	%			9,229			2		0.09	%
Certificates of deposit			67,184			111		0.66	%			68,525			116		0.69	%			75,537			164		0.87	%
Total Interest-Bearing Deposits			661,920			409		0.25	%			658,751			327		0.20	%			574,420			409		0.29	%
FHLB advances			10,000			42		1.64	%			10,000			41		1.66	%			41,153			748		7.29	%
Other borrowings			17,948			272		6.06	%			17,948			272		6.06	%			17,942			272		6.06	%
Total Interest-Bearing Liabilities			27,948			314		4.49	%			27,948			313		4.54	%			59,095			1,020		6.92	%
Noninterest-bearing deposits			757,728									682,880									609,932
Total Funding Sources			1,447,596			723		0.20	%			1,369,579			640		0.19	%			1,243,447			1,429		0.46	%
Noninterest-bearing liabilities			11,891									14,301									11,881
Shareholders’ equity			132,789									132,472									114,881
Total Liabilities and Shareholders’ Equity		$	1,592,276								$	1,516,352								$	1,370,209
Net interest income/spread					$	17,984		4.60	%					$	17,141		4.63	%					$	13,599		4.00	%
Net interest margin								4.61	%								4.65	%								4.03	%

PRIVATE BANCORP OF AMERICA, INC.
Consolidated average balance sheet, interest, yield and rates
(Unaudited)
(Dollars in thousands)
		June 30, 2022									June 30, 2021
		Average Balance			Interest			Average Yield/Rate			Average Balance			Interest			Average Yield/Rate
Interest-Earnings Assets:
Deposits in other financial institutions		$	108,413		$	339		0.63	%		$	187,826		$	99		0.11	%
Investment securities			117,447			972		1.67	%			73,759			656		1.79	%
Loans			1,304,089			35,177		5.44	%			1,085,617			28,796		5.35	%
Total interest-earning assets			1,529,949			36,488		4.81	%			1,347,202			29,551		4.42	%
Noninterest-earning assets			24,572									19,368
Total Assets		$	1,554,521								$	1,366,570
Interest-Bearing Liabilities
Interest-bearing transaction accounts		$	83,145		$	68		0.16	%		$	61,682		$	24		0.08	%
Money market			495,478			433		0.18	%			427,877			466		0.22	%
Savings deposits			13,872			7		0.10	%			8,999			5		0.11	%
Certificates of deposit			67,851			227		0.67	%			87,960			431		0.99	%
Total Interest-Bearing Deposits			660,346			735		0.22	%			586,518			926		0.32	%
FHLB advances			10,000			83		1.67	%			57,017			1,696		6.00	%
Other borrowings			17,949			544		6.11	%			17,941			545		6.06	%
Total Interest-Bearing Liabilities			27,949			627		4.52	%			74,958			2,239		6.03	%
Noninterest-bearing deposits			720,504									578,652
Total Funding Sources			1,408,799			1,362		0.19	%			1,240,128			3,165		0.51	%
Noninterest-bearing liabilities			13,084									13,845
Shareholders’ equity			132,638									112,597
Total Liabilities and Shareholders’ Equity		$	1,554,521								$	1,366,570
Net interest income/spread					$	35,126		4.61	%					$	26,386		3.91	%
Net interest margin								4.63	%								3.95	%

	PRIVATE BANCORP OF AMERICA, INC.
	Condensed Balance Sheets
	(Unaudited)
	(Dollars in thousands, except per share amounts)
	Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
Assets
Cash and due from banks	$	88,792			$	124,015			$	149,085			$	138,553			$	92,108
Interest-bearing time deposits with other institutions		6,157				5,817				5,760				5,760				5,760
Investment securities		113,565				114,382				102,065				93,099				88,755
Loans held for sale		4,460				1,999				24,658				35,448				19,625
Total loans held-for-investment (excluding PPP loans)		1,376,801				1,276,043				1,188,634				1,117,983				1,053,938
SBA PPP loans		2,718				8,795				35,524				74,152				110,673
Allowance for loan losses		(17,776	)			(17,117	)			(16,975	)			(16,141	)			(15,708	)
Net loans		1,361,743				1,267,721				1,207,183				1,175,994				1,148,903
Right of use asset		3,037				3,400				3,760				4,115				5,185
Premises and equipment, net		2,640				2,813				2,294				2,459				2,578
Other assets and interest receivable		31,708				25,335				22,279				19,254				19,856
Total assets	$	1,612,102			$	1,545,482			$	1,517,084			$	1,474,682			$	1,382,770
Liabilities and Shareholders’ Equity
Liabilities
Noninterest Bearing	$	747,006			$	724,469			$	682,589			$	646,233			$	603,914
Interest Bearing		693,646				646,545				663,074				667,012				601,530
Total Deposits		1,440,652				1,371,014				1,345,663				1,313,245				1,205,444
Borrowings		27,950				27,948				27,947				27,945				47,943
Accrued interest payable and other liabilities		13,305				14,630				15,110				11,613				13,059
Total liabilities		1,481,907				1,413,592				1,388,720				1,352,803				1,266,446
Shareholders’ equity
Common stock		71,516				70,899				70,850				70,470				70,405
Additional paid-in capital		3,368				3,602				3,343				3,465				3,179
Retained earnings		64,036				61,424				54,922				47,845				42,810
Accumulated other comprehensive (loss) income		(8,725	)			(4,035	)			(751	)			99				(70	)
Total shareholders’ equity		130,195				131,890				128,364				121,879				116,324
Total liabilities and shareholders’ equity	$	1,612,102			$	1,545,482			$	1,517,084			$	1,474,682			$	1,382,770
Book value per common share	$	23.31			$	23.42			$	22.81			$	21.70			$	20.71
Tangible book value per common share	$	22.68			$	22.80			$	22.26			$	21.27			$	20.33
Shares outstanding		5,584,465				5,630,993				5,627,735				5,617,273				5,617,020
	Regulatory Capital Ratios (PBAM) 1
	Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
Tier 1 leverage ratio		8.61	%			8.85	%			8.42	%			8.19	%			8.36	%
Tier 1 risk-based capital ratio		9.51	%			10.31	%			10.63	%			10.64	%			10.74	%
Common equity Tier 1 ratio		9.51	%			10.31	%			10.63	%			10.64	%			10.74	%
Total risk-based capital ratio		12.01	%			12.94	%			13.38	%			13.48	%			13.68	%
Tangible equity / tangible assets		8.46	%			8.66	%			8.35	%			8.12	%			8.28	%
1 Preliminary ratios for June 30, 2022

	PRIVATE BANCORP OF AMERICA, INC.
	Condensed Statements of Income
	(Unaudited)
	(Dollars in thousands, except per share amounts)
	Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
Interest income	$	18,706			$	17,781			$	17,356			$	16,458			$	15,028
Interest expense		723				640				667				741				1,429
Net interest income		17,983				17,141				16,689				15,717				13,599
Provision for loan losses		659				142				834				433				1,146
Net interest income after provision for loan losses		17,324				16,999				15,855				15,284				12,453
Noninterest income		1,442				3,109				4,265				2,389				2,805
Salary and employee benefits		7,374				7,313				6,492				6,595				5,966
Occupancy and equipment		808				723				741				1,484				820
Data processing		824				653				703				799				690
Professional services		1,835				915				843				552				791
Other expenses		1,759				1,255				1,060				1,034				891
Total noninterest expense		12,600				10,859				9,839				10,464				9,158
Income before provision for income taxes		6,166				9,249				10,281				7,209				6,100
Income taxes		1,769				2,747				2,986				2,158				1,806
Net income	$	4,397			$	6,502			$	7,295			$	5,051			$	4,294
Net income available to common shareholders	$	4,347			$	6,432			$	7,204			$	4,984			$	4,231
Earnings per share
Basic earnings per share	$	0.78			$	1.16			$	1.30			$	0.90			$	0.76
Diluted earnings per share	$	0.77			$	1.13			$	1.28			$	0.89			$	0.75
Average shares outstanding		5,543,065				5,568,400				5,547,422				5,543,403				5,536,111
Diluted average shares outstanding		5,639,282				5,672,701				5,638,186				5,629,900				5,622,075
	Performance Ratios
	Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
ROAA		1.12	%			1.74	%			1.91	%			1.39	%			1.26	%
ROAE		13.43	%			19.91	%			22.72	%			16.61	%			14.99	%
ROTE		13.62	%			20.20	%			23.07	%			16.88	%			15.25	%
Net interest margin		4.61	%			4.65	%			4.44	%			4.39	%			4.03	%
Net interest spread		4.60	%			4.63	%			4.43	%			4.38	%			4.00	%
Efficiency ratio		64.86	%			53.62	%			46.96	%			57.79	%			55.83	%
Noninterest expense / average assets		3.21	%			2.90	%			2.58	%			2.88	%			2.68	%

	PRIVATE BANCORP OF AMERICA, INC.
	(Unaudited)
	Selected Quarterly Average Balances
	(Dollars in thousands)
	Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
Total assets	$	1,592,276			$	1,516,352			$	1,514,583			$	1,442,278			$	1,370,209
Earning assets	$	1,564,662			$	1,494,850			$	1,490,235			$	1,420,970			$	1,351,992
Total loans, including loans held for sale	$	1,339,095			$	1,268,695			$	1,222,234			$	1,185,865			$	1,125,958
Total deposits	$	1,419,648			$	1,341,631			$	1,346,777			$	1,276,349			$	1,184,352
Total equity	$	132,789			$	132,472			$	127,387			$	120,618			$	114,881
	Loan Balances by Type
	(Dollars in thousands)
	Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
Real estate - investor owned	$	390,628			$	350,152			$	324,167			$	307,469			$	293,461
Real estate - owner occupied		359,270				371,840				339,081				329,985				313,579
Real estate - multifamily		121,693				105,964				97,285				82,460				72,790
Real estate - single family		94,212				89,630				86,399				81,239				90,223
Commercial business		359,692				307,421				294,944				274,708				244,493
SBA PPP loans		2,718				8,795				35,524				74,152				110,673
Land and construction		44,856				44,856				39,702				34,996				32,413
Consumer		6,450				6,180				7,049				7,126				6,979
Total loans held for investment	$	1,379,519			$	1,284,838			$	1,224,151			$	1,192,135			$	1,164,611
	Deposits by Type
	(Dollars in thousands)
	Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
Non interest bearing DDA	$	747,006			$	724,469			$	682,589			$	646,233			$	603,914
Interest bearing DDA		93,405				75,904				81,788				68,056				70,320
Savings & MMA		533,145				503,552				513,070				530,782				463,165
Retail CD		3,387				3,384				5,281				5,633				5,827
Jumbo CD		63,709				63,705				62,935				62,541				62,218
Total deposits	$	1,440,652			$	1,371,014			$	1,345,663			$	1,313,245			$	1,205,444
	Asset Quality
	(Dollars in thousands)
	Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
Total loans held-for-investment	$	1,379,519			$	1,284,838			$	1,224,151			$	1,192,135			$	1,164,611
30-89 day past due loans	$	-			$	-			$	-			$	200			$	-
90+ day past due loans	$	-			$	-			$	-			$	-			$	-
Nonaccrual loans	$	1,453			$	1,453			$	1,510			$	1,494			$	1,540
NPAs / Assets		0.09	%			0.09	%			0.10	%			0.10	%			0.11	%
NPLs / Total loans held-for-investment & OREO		0.11	%			0.11	%			0.12	%			0.12	%			0.13	%
Net quarterly charge-offs	$	-			$	-			$	-			$	-			$	-
Net charge-offs/avg loans (annualized)		0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
Allowance for loan losses to loans HFI		1.29	%			1.33	%			1.39	%			1.35	%			1.35	%
Allowance for loan losses to nonaccrual loans		1223.40	%			1178.05	%			1124.11	%			1080.39	%			1020.00	%

FAQ

What were PBAM's earnings in the second quarter of 2022?

PBAM reported a net income of $4.4 million for Q2 2022, with diluted earnings per share of $0.77.

How did PBAM's total loans perform in Q2 2022?

Total loans held-for-investment reached $1.4 billion, increasing by 30.6% year-over-year.

What was the net interest margin for PBAM in Q2 2022?

The net interest margin for Q2 2022 improved to 4.57%.

Did PBAM experience any changes in non-interest income in Q2 2022?

Yes, non-interest income decreased by $1.7 million compared to the previous quarter.

What challenges did PBAM face in Q2 2022?

PBAM faced increased operating expenses and a decline in SBA loan sales due to market conditions.