Pacific State Bancorp 1899 West March Lane
Stockton, CA 95207
209/870-3214 Telephone
209/870-3255 Fax
Press Release
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE OCTOBER 18, 2007
Stockton, California - October 18, 2007
Steven A. Rosso, President and C.E.O. of Pacific State Bancorp (NASDAQ Global
Market/PSBC), the parent company of Pacific State Bank, today reported 3rd
quarter profits and continued asset growth for the Stockton, California based
financial institution. The following reported numbers are for the Company and
Bank combined:
o Net income for the third quarter of 2007 of $1,301,000
o Net Income Year to Date 2007 of $4,036,000
o Total Assets as of September 30, 2007 of $421,122,000.
PSBC quarter over quarter September 30, 2007 compared to September 30, 2006
financial performance information is as follows:
Balance Sheet:
o Total Federal Funds, Interest Bearing Deposits in Banks and
Investment Securities: $66,926,000, an increase of $42,682,000 or
176.05%.
o Net Loans: $308,092,000, an increase of $27,591,000 or 9.84%.
o Total Assets: $421,122,000, an increase of $78,314,000 or 22.84%.
o Non-Interest Bearing Deposits: $60,940,000, a decrease of $2,210,000
or 3.5%.
o Total Deposits: $365,479,000, an increase of $65,630,000 or 21.89%.
o Total Shareholders Equity: $33,677,000, an increase of $7,279,000 or
27.57%.
Income Statement:
o Total Interest Income: $7,937,000, an increase of $995,000 or
14.33%.
o Total Interest Expense: $3,696,000, an increase of $1,217,000 or
49.09%.
o Net Interest Income: $4,241,000, a decrease of $222,000 or 4.97%.
o Non-Interest Income: $589,000, a decrease of $129,000 or 17.94%.
o Non-Interest Expense: $2,711,000, an increase of $109,000 or 4.19%.
As of September 30, 2007 the Company had 86 full-time employees as
compared to 80 as of September 30, 2006.
o Net Income: $1,301,000, a decrease of $211,000 or 13.96%.
o Net Interest Margin: 4.48%, down 131 basis points. The decrease is
due primarily to reduction in loan fees recorded in the third
quarter. Other factors affecting the decrease in net interest margin
were increases in the rates paid on deposits and the growth of
interest bearing deposits, particularly time deposits. The change in
mix was offset somewhat by the increases in the overall yields on
earning assets and the change in mix of earning assets with more
loans and Federal funds sold.
During the third quarter, management also updated the cost model for
deferred loan fees and direct costs associated with making loans,
commitments to lend and purchases of loans. The most significant
change was an increase in the amount of deferred costs associated
with short term loans (less than twelve months).
o Annualized Return on Average Assets: 1.26% down from 1.77%.
o Annualized Return on Average Equity: 15.99% down from 23.93% The
decrease in ROE is attributable to the decrease in earnings of
$211,000 or 13.96% for the quarter ended September 30, 2007 from the
quarter ended September 30, 2006, offset by an increase in
shareholders equity from net income and the proceeds from the
exercising of options. The increase in equity totaled $7,279,000 or
27.57%.
o Efficiency Ratio: 56.13% increasing from 50.22%. The increase was
caused by increased employee expenditure and the purchase of new
technology to support the growth of the Company.
o Basic Earnings Per Share: $0.35, a decrease of $0.09 per share or
20.45%.
o Diluted Earnings Per Share: $0.33, a decrease of $0.06 per share or
15.38%.
Balance Sheet: September 30, 2007 as compared to December 31, 2006
o Total Fed Funds, Interest Bearing Balances in Banks and Investment
Securities: $66,926,000, a increase of $12,189,000 or 22.27%.
o Net Loans: $308,092,000, an increase of $20,774,000 or 7.23%.
o Total Assets: $421,122,000, an increase of $34,370,000 or 8.89%.
o Non-Interest Bearing Deposits: $60,940,000 a decrease of $12,257,000
or 16.75%.
o Total Deposits: $365,479,000, an increase of $24,483,000 or 7.18%.
o Total Shareholders Equity: $33,677,000, an increase of $4,618,000 or
15.89%.
Income Statement: For the nine-month period ended September 30, 2007
compared to the nine-month period ended September 30, 2006:
o Total Interest Income: $23,575,000, an increase of $4,512,000 or
23.67%.
o Total Interest Expense: $10,350,000, an increase of $4,029,000 or
63.74%.
o Net Interest Income: $13,225,000, an increase of $483,000 or 3.79%.
o Non-Interest Income: $1,981,000, an increase of $172,000 or 9.51%.
o Non-Interest Expense: $8,412,000, an increase of $771,000 or 10.09%.
As of September 30, 2007 the Company had 86 full time employees as
compared to 80 at September 30, 2006.
o Net Income: $4,036,000, an increase of $10,000 or 0.25%. Net income
was consistent with the same period in the prior year. Factors
affecting net income include the decrease in net interest margin and
increased operating expenses to support the growth of two new
offices. The increased expenses were offset slightly by increases in
non-interest income and decreases in tax expense.
o Net Interest Margin: 4.91%, down 93 basis points. The decrease is
due primarily to reduction in loan fees recorded in the third
quarter. Other factors affecting the decrease in net interest margin
were increases in the rates paid on deposits and the growth of
interest bearing deposits, particularly time deposits. The change in
mix was offset somewhat by the increases in the overall yields on
earning assets and the change in mix of earning assets with more
loans and Federal funds sold.
During the third quarter, management also updated the cost model for
deferred loan fees and direct costs associated with making loans,
commitments to lend and purchases of loans. The most significant
change was an increase in the amount of deferred costs associated
with short term loans (less than twelve months).
o Annualized Return on Average Assets: 1.36% down from 1.68%.
o Annualized Return on Average Equity: 17.48% down from 23.11%.
o Efficiency Ratio: 55.32% increasing slightly from 52.51%.
o Basic Earnings Per Share: $1.10, a decrease of $0.05 per share or
4.35%.
o Diluted Earnings Per Share: $1.01, a decrease of $0.02 per share or
1.94%.
CREDIT QUALITY EVALUATION
At September 30, 2007, credit quality continues to be strong. The Company
charged off loans in the amount of $143,000 during the third quarter. This
amount consists primarily of one commercial loan relationship in the amount of
$132,000 that was charged off due to bankruptcy. The Company continues to pursue
collection efforts. The charge-offs represent 0.004% of the Company's loan
portfolio. At September 30, 2007 the Company had no non-performing loans and no
loans past due 60 days or more. The Bank continues to have no other real estate
owned.
In addition, the Company's overall real estate portfolio remains very strong.
The Company does not offer any sub-prime real estate financing, nor does it
purchase any single family residential loans of any kind.
Attached are unaudited financial statements supporting the financial information
summarized above. Further inquiries should be directed to Mr. Steven A. Rosso at
209-870-3214, or by mail to P.O. Box 1649, Stockton, California 95201.
Additional information also can be obtained by visiting the Company
website-www.pacificstatebank.com.
PACIFIC STATE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS) September 30, September 30,
ASSETS 2007 2006
Cash and due from banks $ 17,592 $ 12,919
Federal funds sold 18,117 213
------------- -------------
Total cash and cash equivalents 35,709 13,132
Interest bearing deposits in banks 3,000 --
Investment securities - available for sale (amortized cost of
$45,899 in 2007 and $23,112 in 2006) 45,809 24,031
Loans, less allowance for loan losses of $2,598 in 2007 and
$2,604 in 2006 308,092 280,501
Bank premises and equipment, net 13,665 12,019
Company owned life insurance 6,258 6,012
Accrued interest receivable and other assets 8,589 7,113
------------- -------------
Total assets $ 421,122 $ 342,808
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 60,940 $ 63,150
Interest bearing 304,539 236,699
------------- -------------
Total deposits 365,479 299,849
Other borrowings 8,500 4,900
Subordinated debentures 8,764 8,764
Accrued interest payable and other liabilities 4,702 2,897
------------- -------------
Total liabilities 387,445 316,410
Shareholders' equity:
Preferred stock - no par value; 2,000,000 shares
authorized; none issued or outstanding
Common stock - no par value; 24,000,000 shares
authorized; shares issued and outstanding 3,696,157
in 2007 and 3,616,418 in 2006 10,240 8,538
Retained earnings 23,491 17,937
Accumulated other comprehensive (loss), net of tax (54) (77)
------------- -------------
Total shareholders' equity 33,677 26,398
------------- -------------
Total liabilities and shareholders' equity $ 421,122 $ 342,808
============= =============
PACIFIC STATE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS) September 30, December 31,
ASSETS 2007 2006
Cash and due from banks $ 17,592 $ 18,985
Federal funds sold 18,117 31,630
------------- -------------
Total cash and cash equivalents 35,709 50,615
Interest bearing deposits in banks 3,000 --
Investment securities - available for sale (amortized cost of
$45,899 in 2007 and $23,186 in 2006) 45,809 23,107
Loans, less allowance for loan losses of $2,598 in 2007 and
$2,478 in 2006 308,092 287,318
Bank premises and equipment, net 13,665 11,957
Company owned life insurance 6,258 6,079
Accrued interest receivable and other assets 8,589 7,676
------------- -------------
Total assets $ 421,122 $ 386,752
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 60,940 $ 73,197
Interest bearing 304,539 267,799
------------- -------------
Total deposits 365,479 340,996
Other borrowings 8,500 4,900
Subordinated debentures 8,764 8,764
Accrued interest payable and other liabilities 4,702 3,033
------------- -------------
Total liabilities 387,445 357,693
Shareholders' equity:
Preferred stock - no par value; 2,000,000 shares
authorized; none issued or outstanding
Common stock - no par value; 24,000,000 shares
authorized; issued and outstanding 3,696,157
In 2007 and 3,661,477 in 2006 10,240 9,651
Retained earnings 23,491 19,455
Accumulated other comprehensive loss, net of tax (54) (47)
------------- -------------
Total shareholders' equity 33,677 29,059
------------- -------------
Total liabilities and shareholders' equity $ 421,122 $ 386,752
============= =============
PACIFIC STATE BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited SEPTEMBER 30
Three months ended Nine months ended
(IN THOUSANDS, EXCEPT SHARE AMOUNTS) 2007 2006 2007 2006
---------- ---------- ---------- ----------
Interest income:
Interest and fees on loans $ 7,006 $ 6,627 $ 21,148 $ 18,086
Interest on Federal funds sold 396 21 1,065 38
Interest on deposits in banks 14 14 0
Interest on investment securities 521 294 1,348 939
---------- ---------- ---------- ----------
Total interest income 7,937 6,942 23,575 19,063
Interest expense:
Interest on deposits 3,467 2,207 9,623 5,484
Trust preferred securities 139 187 516 531
Interest on borrowings 90 85 211 306
---------- ---------- ---------- ----------
Total interest expense 3,696 2,479 10,350 6,321
---------- ---------- ---------- ----------
Net interest income 4,241 4,463 13,225 12,742
Provision for loan losses 40 90 260 270
---------- ---------- ---------- ----------
Net interest income after --
provision for loan losses 4,201 4,373 12,965 12,472
---------- ---------- ---------- ----------
Non-interest income:
Service charges 208 195 646 653
Other fee income 262 475 1,188 928
Gain from sale of loans 119 48 147 228
---------- ---------- ---------- ----------
Total non-interest income 589 718 1,981 1,809
Non-interest expenses:
Salaries and employee benefits 1,264 1,359 4,252 4,044
Occupancy 292 258 855 665
Furniture and equipment 157 174 524 535
Other 998 811 2,781 2,397
---------- ---------- ---------- ----------
Total non-interest expenses 2,711 2,602 8,412 7,641
---------- ---------- ---------- ----------
Income before income taxes 2,079 2,489 6,534 6,640
Provision for income taxes 778 977 2,498 2,614
---------- ---------- ---------- ----------
Net income $ 1,301 $ 1,512 $ 4,036 $ 4,026
========== ========== ========== ==========
Basic earnings per share $ 0.35 $ 0.44 $ 1.10 $ 1.15
========== ========== ========== ==========
Diluted earnings per share $ 0.33 $ 0.39 $ 1.01 $ 1.04
========== ========== ========== ==========
Weighted average common shares 3,696,157 3,467,819 3,679,763 3,475,663
outstanding
Weighted average common and common
equivalent shares outstanding 3,988,460 3,841,522 4,014,470 3,867,431
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2007 SEPTEMBER 30, 2006
Interest Average Interest Average
Income Yield Income Yield
Average or or Average or or
ASSETS: Balance Expense Cost Balance Expense Cost
Interest-earning assets:
Loans $303,858 $ 7,006 9.15% $280,097 $ 6,627 9.39%
Investment securities 39,890 521 5.18% 24,310 294 4.80%
Federal Funds sold 30,697 396 5.12% 1,651 21 5.05%
Interest bearing deposits in banks 867 14 6.41% - - 0.00%
------------------- -------------------
Total average earning assets 375,312 7,937 8.39% 306,058 6,942 9.00%
Non-earning assets:
Cash and due from banks 14,344 13,833
Other assets 21,620 18,371
-------- --------
Total average assets $411,276 $338,262
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing liabilities:
Deposits
Interest-bearing demand $ 76,347 $ 538 2.80% 89,429 632 2.80%
Savings 5,288 11 0.83% 6,526 17 1.03%
Time deposits 216,093 2,918 5.36% 133,455 1,558 4.63%
Other borrowings 17,264 229 5.26% 15,555 272 6.94%
------------------- -------------------
Total average interest-bearing liabilities 314,992 3,696 4.66% 244,965 2,479 4.01%
======= ========
Noninterest-bearing liabilities:
Demand deposits 61,010 67,163
Other liabilities 2,988 1,069
-------- --------
Total liabilities 378,990 313,197
SHAREHOLDERS' EQUITY: 32,286 25,065
-------- --------
Total average liabilities and shareholders' equity $411,276 $338,262
======== ========
-------- --------
Net interest income $ 4,241 $ 4,463
======== ========
Yield on interest-earning assets 8.39% 9.00%
Cost of funding interest-earning assets 3.91% 3.21%
------- -------
Net interest margin 4.48% 5.79%
======= =======
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2007 SEPTEMBER 30, 2006
Interest Average Interest Average
Income Yield Income Yield
Average or or Average or or
ASSETS: Balance Expense Cost Balance Expense Cost
Interest-earning assets:
Loans $297,362 $ 21,148 9.51% $264,800 $ 18,086 9.13%
Investment securities 34,621 1,348 5.21% 25,629 939 4.90%
Federal Funds sold 27,846 1,065 5.11% 1,052 38 4.83%
Interest bearing deposits in banks 429 14 4.36% - - 0.00%
------------------- -------------------
Total average earning assets 360,258 23,575 8.75% 291,481 19,063 8.74%
Non-earning assets:
Cash and due from banks 15,649 13,210
Other assets 20,977 16,552
-------- --------
Total average assets $396,884 $321,243
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing liabilities:
Deposits
Interest-bearing demand 82,863 1,768 2.85% 93,571 1,814 2.59%
Savings 5,407 38 0.94% 6,452 42 0.87%
Time deposits 197,246 7,817 5.30% 115,750 3,628 4.19%
Other borrowings 14,886 727 6.53% 17,294 837 6.47%
------------------- -------------------
Total average interest-bearing liabilities 300,402 10,350 4.61% 233,067 6,321 3.63%
======= ========
Noninterest-bearing liabilities:
Demand deposits 63,394 63,534
Other liabilities 2,216 1,347
-------- --------
Total liabilities 366,012 297,948
SHAREHOLDERS' EQUITY: 30,872 23,295
-------- --------
Total average liabilities and shareholders' equity $396,884 $321,243
======== ========
-------- --------
Net interest income $ 13,225 $ 12,742
======== ========
Yield on interest-earning assets 8.75% 8.74%
Cost of funding interest-earning assets 3.84% 2.90%
------- -------
Net interest margin 4.91% 5.84%
======= =======