Stockton , California – July 19, 2007
Steve n A. Rosso, President and C.E.O. of Pacific State Bancorp (NASDAQ Global Market/PSBC), the parent company of Pacific State Bank, today reported 2nd quarter profits and continued asset growth for the Stockton, California based financial institution:
- Net income for the second quarter of 2007 of $1,409,000
- Net Income Year to Date 2007 $2,735,000
- Total Assets as of June 30, 2007 of $406,339,000.
PSBC quarter over quarter June 30, 2007 compared to June 30, 2006 financial performance information is as follows:
Balance Sheet:
- Total Federal Funds, Interest Bearing Deposits in Banks and Investment Securities: $68,426,000 , an increase of $45,097,000 or 193.3%.
- Net Loans: $296,138,000 , an increase of $26,031,000 or 9.64%.
- Total Assets: $406,339,000 , an increase of $78,437,000 or 23.92%.
- Non-Interest Bearing Deposits: $63,077,000 , a decrease of $1,050,000 or 1.64%.
- Total Deposits: $352,857,000 , an increase of $65,547,000 or 22.81%.
- Total Share holders Equity: $32,073,000 , an increase of $7,495,000 or 30.49%.
Income Statement:
- Total Interest Income: $8,132,000, an increase of $1,811,000 or 28.65%.
- Total Interest Expense: $3,479,000, an increase of $1,357,000 or 63.95%.
- Net Interest Income: $4,653,000, an increase of $454,000 or 10.81%.
- Non-Interest Income: $707,000, an increase of $207,000 or 41.40%.
- Non-Interest Expense: $3,002,000, an increase of $550,000 or 22.71%. As of June 30, 2007 the Company had 86 full-time employees as compared to 76 as of June 30, 2006.
- Net Income: $1,409,000, an increase of $102,000 or 7.80%.
- Net Interest Margin: 5.19%, down 55 basis points. The decrease is due primarily to increases in the rates paid on deposits and other borrowings and the change in mix of deposits with more time deposits offset 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.
- Annualized Return on Average Assets: 1.43% down from 1.65%.
- Annualized Return on Average Equity: 18.33% down from 22.60%. The decrease in ROE is primarily attributable to an increase in shareholders equity from net income, the proceeds from the sale of common stock to a new member of the Board of Directors and the exercise of options. The increase in equity totaled $7,495,000 or 30.49%.
- Efficiency Ratio: 55.81% increasing slightly from 52.18%.
- Basic Earnings Per Share: $0.38, an increase of $0.01 per share or 2.70%.
- Diluted Earnings Per Share: $0.35, an increase of $0.01 per share or 4.62%.
Balance Sheet: June 30, 2007 as compared to December 31, 2006
- Total Fed Funds and Investment Securities: $68,426,000 , a increase of $13,689,000 or 25.01%.
- Net Loans: $296,138,000 , an increase of $8,820,000 or 3.07%.
- Total Assets: $406,339,000 , an increase of $19,587,000 or 5.06%.
- Non-Interest Bearing Deposits: $63,077,000 a decrease of $10,120,000 or 13.83%.
- Total Deposits: $352,857,000 , an increase of $11,861,000 or 3.48%.
- Total Share holders Equity: $32,073,000 , an increase of $3,014,000 or 10.37%.
Income Statement:
- Total Interest Income: $15,638,000, an increase of $3,525,000 or 29.10%.
- Total Interest Expense: $6,654,000, an increase of $2,813,000 or 73.26%.
- Net Interest Income: $8,984,000, an increase of $712,000 or 8.61%.
- Non-Interest Income: $1,392,000, an increase of $293,000 or 26.66%.
- Non-Interest Expense: $5,701,000, an increase of $662,000 or 13.14%. As of June 30, 2007 and December 31, 2006 the Company had 86 full-time employees.
- Net Income: $2,735,000, an increase of $221,000 or 8.79%.
- Net Interest Margin: 5.14%, down 71 basis points. The decrease is due primarily to increases in the rates paid on deposits and other borrowings and the change in mix of deposits with more time deposits offset 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.
- Annualized Return on Average Assets: 1.42% down from 1.62%.
- Annualized Return on Average Equity: 18.29% down from 22.64%. The decrease in ROE is primarily attributable to an increase in shareholders equity from net income, the proceeds from the sale of common stock to a new member of the Board of Directors and the exercise of options. The increase in equity totaled $3,014,000 or 10.37%.
- Efficiency Ratio: 54.94% increasing slightly from 53.77%.
- Basic Earnings Per Share: $0.75, an increase of $0.03 per share or 4.17%.
- Diluted Earnings Per Share: $0.68, an increase of $0.03 per share or 4.62%.
Balance Sheet: June 30, 2007 as compared to March 31, 2007
- Total Fed Funds and Investment Securities: $68,426,000 , a decrease of $6,533,000 or 8.72%.
- Net Loans: $296,138,000 , an increase of $8,664,000 or 3.01%.
- Total Assets: $406,339,000 , an increase of $2,144,000 or 0.53%.
- Non-Interest Bearing Deposits: $63,077,000 a decrease of $3,482,000 or 5.23%.
- Total Deposits: $352,857,000 , a decrease of $3,204,000 or 0.90%.
- Total Borrowings: $8,500,000, an increase of $3,600,000 or 73.47%
- Total Share holders Equity: $32,073,000 , an increase of $1,607,000 or 5.27%.
Income Statement: For the quarter ended June 30, 2007 compared to the quarter ended March 31, 2007
- Total Interest Income: $8,132,000, an increase of $626,000 or 8.34%.
- Total Interest Expense: $3,479,000, an increase of $304,000 or 9.61%.
- Net Interest Income: $4,653,000, an increase of $322,000 or 7.43%.
- Non-Interest Income: $706,000, an increase of $20,000 or 2.92%.
- Non-Interest Expense: $2,991,000, an increase of $281,000 or 10.37%. At June 30, and March 31, 2007 the Company had 86 full-time employees.
- Net Income: $1,409,000, an increase of $83,000 or 6.26%.
- Net Interest Margin: 5.19%, up 9 basis points. The increase is due to the increase in the loan fees recognized in the second quarter. Loan fees for the second quarter of 2007 were $809,000 up $387,000 or 91.71%.
- Annualized Return on Average Assets: 1.43% up slightly from 1.41%.
- Annualized Return on Average Equity: 18.33% up slightly from 18.25%.
- Efficiency Ratio: 55.81% increasing slightly from 53.80%.
- Basic Earnings Per Share: $0.38, an increase of $0.02 per share or 5.56%.
- Diluted Earnings Per Share: $0.35, an increase of $0.02 per share or 6.06%.
Pacific State Bancorp Construction Loan Portfolio Review
Due to the concerns for the Central Valley of California single family real estate market and the high ratios of delinquencies and foreclosures in this market; the management of Pacific State Bank felt that the inclusion of the following analysis of our total speculative real estate loan portfolio would be of interest to our investors.
In reviewing the Bank’s spec construction loan portfolio for single family dwellings (SFD) at June 30, 2007, it was determined that Pacific State Bank has 29 homes under construction or completed in projects from Oroville to Fresno, California. The total loan commitment for these loans is $9,806,000 with an average loan of $338,138. The total appraised value or adjusted sales price on these homes is$13,695,750 providing equity of $3,889,750. The aggregate loan to value ratio for the spec construction SFD portfolio is 72%. Ten of these spec construction homes are one or two unit in fill SFD’s representing 34% of the portfolio. For all loans, the bank has worked with the developers or builders in the past. New spec units are not financed unless all inventories in the development project have been sold. In all of the projects; sales are either pending closure, or have already closed. The one apartment complex, located in Tracy, California, (32 units) is approximately 95% complete and we expect the occupancy permits to be issued shortly.
Development loans with a total of 668 single family lots in the Bank’s portfolio are either fully finished or permitted legal lots with total outstanding debt or loan commitments of $12,467,612. The average loan per lot is $18,664. The total appraised value of the 668 lots is $32,767,518 providing a LTV of 38%. In each development, the Bank has received pay downs from project sales or debtor cash reductions. These projects are located in Oroville, Stockton, Galt, Murphys, and Fresno, California. Only 13 finished lots are in Stockton, California. The Bank also has a land loan in Tracy, California, comprising 38 acres that was purchased for $3,807,000 and has an outstanding loan balance of $2,285,000. The loan to value is 54% based on an appraised value of $4,200,000. The borrower is working the parcel through the permitting process.
The Bank also has several commercial projects that are spec industrial, commercial retail/office or flex-office warehouse developments. These projects are in various stages of completion or in position to be placed into permanent financing either with the Bank or with loans the Bank will sell into the secondary market. PSB currently has $40,000,000 in loan commitment for these projects. The markets for these projects are very strong with 0-1% current vacancy rates for Stockton and Lathrop industrial warehousing. Other projects include mini-storage, office, flex-warehousing and retail space.
As of June 30, 2007 the Bank has total gross loans and commitments for spec construction (all spec classifications) of approximately $60,000,000 which represents approximately 14.2% of the gross loans and commitments. The Bank has $423,951,000 in outstanding loans and loan commitments as of June 30, 2007.
Credit Quality Evaluation
At June 30, 2007, credit quality continues to be strong. The Company had one impaired loan in the amount of $121,000. This represents 0.004% of the Company’s loan portfolio. This loan has since become current. As of June 30, 2007, loans past due 30 to 59 days totaled $165,000 or 0.006% of the Company’s loan portfolio. Loans past due 60 to 89 days totaled $3,000 or 0.0001% of the loan portfolio. The bank continues to have no other real estate owned.
Attached are certain unaudited financial statements supporting the financial information summarized above. Further inquiries should be directed to Mr. Steven 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) |
June 30, |
December 31, |
Assets |
2007 |
2006 |
|
Cash and due from banks |
$14,257 |
$18,985 |
Federal funds sold |
31,164 |
31,630 |
Investment securities – available for sale (amortized cost of $38,216 in 2007 and $23,186 in 2006) |
37,262 |
23,107 |
Loans, less allowance for loan losses of $2,699 in 2007 and $2,478 in 2006 |
296,138 |
287,318 |
Premises and equipment, net |
13,020 |
11,957 |
Company owned life insurance |
6,198 |
6,079 |
Accrued interest receivable and other assets |
8,300 |
7,676 |
Total assets |
$406,339 |
$386,752 |
|
|
|
Liabilities and Shareholders’ Equity |
|
Deposits: |
|
|
Non-interest bearing |
$63,077 |
$73,197 |
Interest bearing |
289,780 |
267,799 |
Total deposits |
352,857 |
340,996 |
Other borrowings |
8,500 |
4,900 |
Subordinated debentures |
8,764 |
8,764 |
Accrued interest payable and other liabilities |
4,145 |
3,033 |
Total liabilities |
374,266 |
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 |
9,961 |
9,651 |
Retained earnings |
22,190 |
19,455 |
Accumulated other comprehensive loss, net of tax |
(77) |
(47) |
Total shareholders’ equity |
32,073 |
29,059 |
Total liabilities and shareholders’ equity |
$406,339 |
$386,752 |
|
|
|
PACIFIC STATE BANCORP AND SUBSIDIARY |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
|
|
(in thousands, except share amounts) |
June 30, |
June 30, |
Assets |
2007 |
2006 |
|
Cash and due from banks |
$14,257 |
$13,702 |
Federal funds sold |
31,164 |
0 |
Investment securities – available for sale (amortized cost of $38,216 in 2007 and $23,546 in 2006) |
37,262 |
23,329 |
Loans, less allowance for loan losses of $2,699 in 2007 and $2,516 in 2006 |
296,138 |
270,107 |
Premises and equipment, net |
13,020 |
9,564 |
Company owned life insurance |
6,198 |
4,499 |
Accrued interest receivable and other assets |
8,300 |
6,701 |
Total assets |
$406,339 |
$327,902 |
|
|
|
Liabilities and Shareholders’ Equity |
|
Deposits: |
|
|
Non-interest bearing |
$63,077 |
$64,127 |
Interest bearing |
289,780 |
223,183 |
Total deposits |
352,857 |
287,310 |
Other borrowings |
8,500 |
4,900 |
Subordinated debentures |
8,764 |
8,764 |
Accrued interest payable and other liabilities |
4,145 |
2,350 |
Total liabilities |
374,266 |
303,324 |
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
3,589,458 in 2006 |
9,961 |
8,280 |
Retained earnings |
22,190 |
16,426 |
Accumulated other comprehensive loss, net of tax |
(77) |
(128) |
Total shareholders’ equity |
32,073 |
24,578 |
Total liabilities and shareholders’ equity |
$406,339 |
$327,902 |
|
|
|
PACIFIC STATE BANCORP |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
June 30 |
June 30 |
(Unaudited) |
Three months ended |
Six months ended |
(in thousands, except share amounts) |
2007 |
2006 |
2007 |
2006 |
Interest income: |
|
|
|
|
Interest and fees on loans |
$7,300 |
$5,998 |
$14,142 |
$11,459 |
Interest on Federal funds sold |
348 |
6 |
669 |
17 |
Interest on investment securities |
484 |
317 |
827 |
637 |
Total interest income |
8,132 |
6,321 |
15,638 |
12,113 |
Interest expense: |
|
|
|
|
Interest on deposits |
3,239 |
1,792 |
6,156 |
3,276 |
Interest on subordinated debentures |
185 |
180 |
377 |
344 |
Interest on borrowings |
55 |
150 |
121 |
221 |
Total interest expense |
3,479 |
2,122 |
6,654 |
3,841 |
Net interest income before
provision for loan losses |
4,653 |
4,199 |
8,984 |
8,272 |
Provision for loan losses |
55 |
90 |
220 |
180 |
Net interest income after |
|
|
|
|
provision for loan losses |
4,598 |
4,109 |
8,764 |
8,092 |
Non-interest income: |
|
|
|
|
Service charges |
217 |
250 |
438 |
458 |
Other fee income |
470 |
230 |
926 |
461 |
Gain onsale of loans |
19 |
20 |
28 |
180 |
Total non-interest income |
706 |
500 |
1,392 |
1,099 |
Non-interest expenses: |
|
|
|
|
Salaries and employee benefits |
1,506 |
1,335 |
2,988 |
2,685 |
Occupancy |
277 |
208 |
563 |
407 |
Furniture and equipment |
200 |
183 |
367 |
361 |
Other |
1,019 |
726 |
1,783 |
1,586 |
Total non-interest expenses |
3,002
|
2,452 |
5,701 |
5,039 |
Income before provision for
income taxes |
2,313 |
2,157 |
4,455 |
4,152 |
Provision for income taxes |
904 |
850 |
1,720 |
1,638 |
Net income |
$1,409 |
$1,307 |
$2,735 |
$2,514 |
Basic earnings per share |
$0.38 |
$0.37 |
$0.75 |
$0.72 |
Diluted earnings per share |
$0.35 |
$0.34 |
$0.68 |
$0.65 |
Weighted average common shares outstanding |
3,677,935 |
3,510,801 |
3,665,558 |
3,493,964 |
Weighted average common and common equivalent shares outstanding |
|
|
|
|
4,002,109 |
3,900,010 |
3,999,032 |
3,894,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Three Months Ended |
|
|
|
June 30, 2007 |
June 30, 2006 |
|
|
|
|
Interest |
Average |
|
Interest |
Average |
|
|
|
Average |
Income or |
Yield or |
Average |
Income or |
Yield or |
Assets: |
Balance |
Expense |
Cost |
Balance |
Expense |
Cost |
Interest-earning assets: |
|
|
|
|
|
|
Loans |
295,030 |
7,300 |
9.92% |
265,333 |
5,998 |
9.07% |
Investment securities |
37,310 |
484 |
5.20% |
27,095 |
317 |
4.69% |
Federal funds sold |
27,424 |
348 |
5.09% |
861 |
6 |
2.80% |
|
|
|
|
|
|
|
|
|
Total average earning assets |
359,764 |
8,132 |
9.07% |
293,289 |
6,321 |
8.64% |
|
|
|
|
|
|
|
|
|
Non-earning assets: |
|
|
|
|
|
|
Cash and due from banks |
16,644 |
|
|
13,498 |
|
|
Other assets |
20,143 |
|
|
11,215 |
|
|
|
|
Total average assets |
396,551 |
|
|
318,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity: |
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
84,522 |
622 |
2.95% |
89,412 |
573 |
2.57% |
|
Savings |
5,343 |
13 |
0.98% |
6,298 |
15 |
0.96% |
|
Time deposits |
196,233 |
2,604 |
5.32% |
116,062 |
1,204 |
4.16% |
|
Other borrowings |
13,564 |
240 |
7.10% |
19,592 |
330 |
6.76% |
|
|
|
|
|
|
|
|
|
|
|
Total average interest-bearing liabilities |
299,661 |
3,479 |
4.66% |
231,364 |
2,122 |
3.68% |
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
Demand deposits |
63,893 |
|
|
62,558 |
|
|
|
Other liabilities |
2,157 |
|
|
881 |
|
|
|
|
Total liabilities |
365,711 |
|
|
294,803 |
|
|
Shareholders' Equity: |
30,839 |
|
|
23,199 |
|
|
Total average liabilities and shareholders' equity |
396,551 |
|
|
318,002 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
4,653 |
|
|
4,199 |
|
|
|
|
|
|
|
|
|
|
Yield on interest-earning assets |
|
|
9.07% |
|
|
8.64% |
Cost of funding interest-earning assets |
|
3.88% |
|
|
2.90% |
Net interest margin |
|
|
5.19% |
|
|
5.74% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
Six Months Ended |
|
|
|
June 30, 2007 |
June 30, 2006 |
|
|
|
|
Interest |
Average |
|
Interest |
Average |
|
|
|
Average |
Income or |
Yield or |
Average |
Income or |
Yield or |
Assets: |
Balance |
Expense |
Cost |
Balance |
Expense |
Cost |
Interest-earning assets: |
|
|
|
|
|
|
Loans |
293,728 |
14,142 |
9.71% |
257,036 |
11,459 |
8.99% |
Investment securities |
31,945 |
821 |
5.18% |
27,408 |
637 |
4.69% |
Federal funds sold |
26,393 |
669 |
5.11% |
845 |
17 |
4.06% |
Interest bearing deposits in banks |
215 |
6 |
5.63% |
0 |
0 |
0.00% |
|
|
Total average earning assets |
352,281 |
15,638 |
8.95% |
285,289 |
12,113 |
8.56% |
|
|
|
|
|
|
|
|
|
Non-earning assets: |
|
|
|
|
|
|
Cash and due from banks |
16,316 |
|
|
12,896 |
|
|
Other assets |
21,007 |
|
|
14,431 |
|
|
|
|
Total average assets |
389,604 |
|
|
312,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity: |
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
