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ProAmerica Bank Reports Record 2013 Fourth Quarter and Full-Year Net Income

LOS ANGELES, CA -- (Marketwired) -- 02/25/14 -- ProAmérica Bank (OTCQB: PMRA) today reported Net Income for the fourth quarter of 2013 of $3.7 million, or $1.32 per diluted common share. Net Income was $4.5 million, or $1.62 per diluted common share for the year ended December 31, 2013. Net Income for both periods includes $2.9 million from the full recognition of its deferred tax asset. "We are pleased to report strong earnings, loan growth and significantly improved asset quality in 2013," stated L. Bruce Mills, Jr., President and CEO. "We have a dedicated team at ProAmérica Bank, solid market alignment, and have accomplished much in a slowly recovering economy," continued Mills.

"ProAmérica Bank has continued to build on its solid reputation in emerging and local markets with strong financial results," stated Executive Chairwoman Maria Contreras-Sweet. "This is a reflection of our team's ability to perform in an environment with intense competitive and economic pressures. We have grown our client base while improving credit quality and maintaining profitability. This growth is thanks in part to our dedicated employees who remain committed to a customer-centric approach to the business of banking, always ready with the personal touch that sets us apart."

"As I look forward to the prospect of serving in the public sector and expanding my commitment to small businesses on a national scale as the nominee to be Administrator of the SBA, I know that the Bank is in excellent hands. ProAmérica Bank has a strong infrastructure in place to continue the mission that the Board and shareholders envisioned when the Bank was first formed," Contreras-Sweet concluded.

2013 Fourth Quarter/Annual Highlights

  • Three-month Net Income of $3,721,000, compared to Net Income of $314,000 in the prior year fourth quarter. Net Income for the year ended December 31, 2013 was $4,520,000, compared to $1,037,000 in 2012.

  • Total Assets at December 31, 2013 were $152.9 million, a decrease of $1.2 million or 1% from December 31, 2012.

  • Total Loans at December 31, 2013 increased to $112.0 million, an increase of $15.5 million or 16% from December 31, 2012.

  • Total Deposits at December 31, 2013 decreased to $124.4 million, a decline of $5.9 million or 5% from December 31, 2012.

  • Nonperforming assets were reduced to $213,000 at December 31, 2013, a 98% decrease from December 31, 2012.

Capital ratios were in excess of all minimums required to be "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage Ratio of 16.7% and a Total Risk-Based Capital Ratio of 21.0% at December 31, 2013. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital Ratio.

Financial Results
Net Income for the three months ended December 31, 2013 was $3,721,000, compared to $314,000 in 2012. Net Income for the year ended December 31, 2013 was $4,520,000, compared to $1,037,000 in 2012. Net Income for both periods in 2013 includes the impact of reversing the Bank's $2,949,000 valuation allowance against its deferred tax asset that arose from prior years' net operating losses. The reversal was made as a result of Management's belief that it is more likely than not that the Bank will be able to use the net operating losses to offset Federal and State income taxes due in future periods. The Bank has achieved profitability in 12 of the past 13 quarters.

Adjusted income from operations (income before provisions for loan losses and income taxes) was $772,000 for the fourth quarter of 2013, as compared to a $315,000 for the same period in 2012. Adjusted income from operations was $1,172,000 for the year ended December 31, 2013, as compared to $1,038,000 in the previous year. Management believes adjusted income from operations is a better measure of core earnings performance.

For the 2013 fourth quarter, Net Interest Income before the Provision for Loan Losses increased $145,000 compared to the 2012 fourth quarter. The Net Interest Margin increased to 4.24% for the quarter ended December 31, 2013, up from 3.89% for the 2012 fourth quarter. The increase was due to a higher level of average loans as a percentage of average assets in the fourth quarter of 2013. For the year ended December 31, 2013, Net Interest Income before the Provision for Loan Losses increased $260,000 compared to 2012. The Net Interest Margin declined to 4.04% for the year ended December 31, 2013, down from 4.27% for 2012. The decrease was due to a lower level of average loans as a percentage of average assets in 2013 as compared to 2012.

There was no Provision for Loan Losses required in the fourth quarters of 2013 or 2012. For the year ended December 31, 2013, a negative Provision for Loan Losses of $400,000 was recorded due to improved asset quality. There was no Provision for Loan Losses required in 2012.

Non-interest Income increased $292,000, or 97% in the fourth quarter 2013 versus 2012 due to the receipt of a $323,000 Bank Enterprise Award. The award resulted from the Bank's lending performance in lower income census tracts in 2013. Non-interest Income increased $443,000, or 58% for the year ended December 31, 2013 versus 2012 as a result of the receipt of a $323,000 Bank Enterprise Award and recoveries of $448,000 of interest income from prior periods upon the payoff of loans previously on nonaccrual. These amounts were partly offset by a reduction in gains on the sales of SBA loans compared to 2012. Gains on sales of SBA loans were $183,000 in 2013 and $510,000 in 2012.

Non-interest Expense for the 2013 fourth quarter was $1,386,000, compared with $1,406,000 for the 2012 fourth quarter. Increases in Salaries and Employee Benefits expense and Occupancy Expense were offset by lower Operating Expense. Non-interest Expense for the year ended December 31, 2013 was $6,053,000, compared with $5,484,000 for the 2012 fourth quarter. Salaries and Employee Benefits increased as a result of hiring additional staff and the addition of a 401(k) plan in 2013. Company contributions to the plan totaled $66,000 for the year. Stock Based Compensation Expense increased $199,000 for 2013 primarily as a result of a shareholder approved stock option program.

The efficiency ratio was 64% for the 2013 fourth quarter, compared with 82% for the same period in 2012. The efficiency ratio was 84% for the years ended December 31, 2013 and 2012.

Loans, before the allowance for loan losses, increased 16% to $112.0 million at December 31, 2013, compared to $96.5 million at December 31, 2012.

Total Deposits decreased 5% to $124.5 million at December 31 2013, down from $130.3 million at December 31, 2012. The decline was a result of the Bank reducing certain concentrations and focusing on core deposits.

Asset Quality
Nonperforming Assets (the sum of loans past due 90 days and accruing, nonaccrual loans and other real estate owned) decreased to $213,000, or 0.1% of total assets at December 31, 2013, compared with $9,531,000, or 6.2% of total assets at December 31, 2012. All of the nonaccrual loans are current in their payments. The Bank sold its only other real estate owned in February 2013 at a small loss.

The Allowance for Loan Losses was $2.5 million, or 2.2% of loans, at December 31, 2013, compared with $2.9 million, or 3.0% of loans, at December 31, 2012.

The Bank had net recoveries to average loans outstanding of .02% in 2013 and net charge-offs to average loans outstanding of .20% for the year ended December 31, 2012. Nonaccrual loans declined 96% to $213,000 as of December 31, 2013, compared to the prior year end.

Capital Resources
Total Shareholders' Equity increased to $27.4 million at December 31, 2013 from $22.6 million at December 31, 2012. The Bank's book value available to common shareholders per common share increased to $8.54 at December 31, 2013 from $6.86 at December 31, 2012.

At December 31, 2013, the Bank's Tier 1 Leverage Capital Ratio was 16.7% versus 14.9% at December 31, 2012. The Total Risk-based Capital Ratio was 21.0% as of December 31, 2013 and 2012.

ProAmérica Bank provides a full range of financial services, including credit and deposit products, SBA loan products, cash management, and internet banking for businesses, professionals, nonprofits and high net worth individuals from its headquarters office at 888 West Sixth Street, Second Floor, Los Angeles, CA 90017-2728. Information on products and services may be obtained by calling (213) 613-5000 or visiting the Bank's website at

This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about ProAmérica Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: ProAmérica Bank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in ProAmérica Bank's reports and filings with banking regulatory agencies. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and ProAmérica Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

                         (Dollars in thousands)

                                   December 31,  December 31,        %
                                       2013          2012         Change
                                   ------------  ------------  ------------
                                     Unaudited     Unaudited

  Cash and Due From Banks          $      1,678  $      2,440         -31.2%
  Federal Funds Sold                     28,440        43,390         -34.5%
  Interest-bearing Balances at
   Other Financial Institutions           7,008         7,701          -9.0%
                                   ------------  ------------  ------------
    Total Cash and Cash
     Equivalents                         37,126        53,531         -30.6%
                                   ------------  ------------  ------------

  Loans Net of Deferred Loan
   Fees/Costs                           111,955        96,467          16.1%
  Allowance for Loan Losses               2,491         2,869         -13.2%
                                   ------------  ------------  ------------
    Loans Net of Allowance for
     Loan Losses                        109,464        93,598          17.0%
  Premises and Equipment, net               939         1,034          -9.2%
  Federal Home Loan Bank Stock              482           515          -6.4%
  Other Real Estate Owned                     0         3,920        -100.0%
  Accrued Interest Receivable and
   Other Assets                           4,915         1,497         228.3%
                                   ------------  ------------  ------------

    Total Assets                   $    152,926  $    154,095          -0.8%
                                   ------------  ------------  ------------

  Non-Interest-Bearing Demand
   Deposits                        $     24,352  $     26,443          -7.9%

  Interest-Bearing Demand Deposits
   (NOW Deposits)                         3,113         2,262          37.6%
  Savings and Money Market               31,460        46,686         -32.6%
  Certificates of Deposit                65,533        54,953          19.3%
                                   ------------  ------------  ------------
    Total Interest-bearing
     Deposits                           100,106       103,901          -3.7%
                                   ------------  ------------  ------------
    Total Deposits                      124,458       130,344          -4.5%

  Other Borrowings                            0             0           0.0%
  Accrued Interest Payable and
   Other Liabilities                      1,065         1,121          -5.0%
                                   ------------  ------------  ------------

Total Liabilities                       125,523       131,465          -4.5%

Shareholders' Equity:
  Common Stock                           27,308        27,248           0.2%
  Additional Paid in Capital              1,910         1,717          11.2%
  Accumulated Deficit                    (5,565)      (10,085)        -44.8%
  SBLF Preferred Stock                    3,750         3,750           0.0%
                                   ------------  ------------  ------------
    Total Shareholders' Equity           27,403        22,630          21.1%
                                   ------------  ------------  ------------

    Total Liabilities and
     Shareholders' Equity          $    152,926  $    154,095          -0.8%
                                   ------------  ------------  ------------

    Tier 1 leverage                       16.68%        14.88%
    Tier 1 risk-based capital             19.76%        19.71%
    Total risk-based capital              21.02%        20.97%

                         For the Periods Indicated
               (Dollars in thousands except per share data)

                        Three Months                  Twelve Months
                ----------------------------  -----------------------------
For The Periods
 Ended December                          %                              %
 31,               2013       2012    Change     2013        2012    Change
--------------- ---------- ---------- ------  ----------  ---------- ------
                 Unaudited  Unaudited          Unaudited   Unaudited

  Interest and
   Fees on
   Loans        $    1,637 $    1,492    9.7% $    6,343  $    6,072    4.5%
  Interest on
   Funds Sold           18         23  -21.7%         85          57   49.1%
  Interest on
   Balances at
   Institutions         10         12  -16.7%         44          45   -2.2%
  Dividends on
   FHLB and
   PCBB Stock           20          8  150.0%         34          14  142.9%
                ---------- ---------- ------  ----------  ---------- ------
     Income          1,685      1,535    9.8%      6,506       6,188    5.1%

  Interest on
   Accounts            120        115    4.3%        482         424   13.7%
                ---------- ---------- ------  ----------  ---------- ------

  Net Interest
   Income            1,565      1,420   10.2%      6,024       5,764    4.5%

Provision /
 (Reversal) for
 Loan Losses             0          0     NA        (400)          0     NA
                ---------- ---------- ------  ----------  ---------- ------

  Net Interest
   Income After
   Provision         1,565      1,420   10.2%      6,424       5,764   11.5%
     for Loan

   Income              593        301   97.0%      1,201         758   58.4%

  Salaries and
   Benefits            872        855    2.0%      3,712       3,364   10.3%
  Stock Based
   Expense              26         12  116.7%        240          41  485.4%
   Expense             161        150    7.3%        618         566    9.2%
   Expense             327        389  -15.9%      1,483       1,513   -2.0%
                ---------- ---------- ------  ----------  ---------- ------
    Total Non-
     Expense         1,386      1,406   -1.4%      6,053       5,484   10.4%

   Income              772        315  145.1%      1,572       1,038   51.4%

Provision for
 Income Taxes       (2,949)         1     NA      (2,948)          1     NA

  Net Income    $    3,721 $      314 1085.0% $    4,520  $    1,037  335.9%
                ---------- ---------- ------  ----------  ---------- ------

  Earnings per
   share -
   basic        $     1.34 $     0.11 1076.5% $     1.64  $     0.38  334.6%
                ---------- ---------- ------  ----------  ---------- ------

  Earnings per
   share -
   diluted      $     1.32 $     0.11 1066.1% $     1.62  $     0.37  332.0%
                ---------- ---------- ------  ----------  ---------- ------

                         For the Periods Indicated
         (Dollars in thousands except share and per share data)

                          Three Months                 Twelve Months
                  ---------------------------  ----------------------------
For The Period
 Ended December                           %                             %
 31,                 2013      2012    Change     2013       2012    Change
----------------- --------- ---------  ------  ---------  ---------  ------
                  Unaudited Unaudited          Unaudited  Unaudited
Per Share:
  Net income,
   basic and
   diluted        $    1.34 $    0.11  1076.5% $    1.64  $    0.38   334.6%
  Net income,
   diluted        $    1.32 $    0.11  1066.1% $    1.62  $    0.37   332.0%
  Book value -
   Common         $    8.54 $    6.86    24.5%

Common Shares
  End of period   2,771,000 2,751,000     0.7% 2,771,000  2,751,000     0.7%
  Average for
   period         2,771,000 2,751,000     0.7% 2,758,880  2,750,604     0.3%

Financial Ratios:
   Return on
    assets             9.90%     0.83% 1092.8%      2.99%      0.74%  304.1%
   Return on
    common equity     70.00%     6.65%  952.6%     22.91%      5.61%  308.4%
   Net interest
    margin             4.24%     3.89%    9.0%      4.04%      4.27%   -5.4%
    ratio             64.23%    81.70%  -21.4%     83.78%     84.08%   -0.4%

   Tier 1
    leverage          16.68%    14.88%   12.1%
   Tier 1 risk-
    based capital     19.76%    19.71%    0.3%
   Total risk-
    based capital     21.02%    20.97%    0.2%

Asset Quality
  Allowance for
   loan and lease
   losses to:
   Total loans         2.22%     2.97%  -25.3%
    loans           1171.73%    51.14% 2191.2%
   assets to:
   Total loans
    and other
    real estate
    owned              0.19%     9.49%  -98.0%
   Total assets        0.14%     6.19%  -97.7%
  Net charge-offs
   to average
   (annualized)       -0.01%    -0.02%  -50.0%     -0.02%      0.20% -110.0%

Asset Quality
   loans (1)      $     213 $   5,611   -96.2%
  Other real
   estate owned           0     3,920  -100.0%
                  --------- ---------  ------
    assets              213     9,531   -97.8%

(1) Nonaccrual
 loans less than
 30 days past due $     213 $   5,611   -96.2%


ProAmerica Bank
Maria Contreras-Sweet

L. Bruce Mills, Jr.
CEO / President

Frank E. Smith

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