Second Quarter 2024 Highlights Net income for the second quarter of 2024 of $7.8 million, compared to $7.9 million in the prior quarter and $15.5 million (GAAP basis), or $8.3 million(1) (as adjusted), in the second quarter of 2023. The second quarter of 2023 included loan recoveries of $8.7 million and a $1.6 million benefit from legal fees waived or collected related to the settlement of the ANI loan lawsuit (see non-GAAP reconciliation in the accompanying financial tables of this press release). Net income for the second quarter of 2024 represents a return on average assets of 1.40% and a return on average tangible common equity of 15.99% Diluted earnings per share for the second quarter of 2024 of $1.35, compared to $1.36 in the prior quarter and $2.69 (GAAP basis), or $1.43(1) (as adjusted), in the second quarter of 2023 Loans held-for-investment ("HFI") totaled $1.98 billion as of June 30, 2024, an increase of $72.7 million or 3.8% from March 31, 2024. Loans HFI increased 15.3% year over year Provision for credit losses for the second quarter of 2024 was $2.1 million, compared to $0.2 million for the prior quarter and a net reversal of $7.1 million for the second quarter of 2023. The allowance for loan losses was 1.34% of loans HFI as of June 30, 2024 Credit trends remained positive with total criticized and classified loans at $16.9 million, or 0.85% of total loans, down from the prior quarter of $27.4 million, or 1.44% of total loans Total deposits were $2.00 billion as of June 30, 2024, an increase of $97.1 million or 5.1% from March 31, 2024. Total deposits increased 17.8% year over year.  Federal Home Loan Bank advances decreased by $5.0 million as a result of deposit growth. Core deposits were $1.74 billion as of June 30, 2024, an increase of $136.6 million or 8.5% from March 31, 2024 Net interest margin was 4.48% for the second quarter of 2024, as compared to 4.31% for the prior quarter and 4.73% for the second quarter of 2023 Total cost of funding sources was 2.78% for the second quarter of 2024, an increase from 2.70% in the prior quarter and 1.82% in the second quarter of 2023 Tangible book value per share was $34.65 as of June 30, 2024, an increase of $1.10 since March 31, 2024 primarily as a result of strong earnings. Tangible book value per share increased 3.3% quarter-over-quarter and 20.2% year over year. LA JOLLA, Calif., July 19, 2024 (GLOBE NEWSWIRE) -- Private Bancorp of America, Inc. (OTCQX:PBAM), ("Company") and CalPrivate Bank ("Bank") announced unaudited financial results for the second fiscal quarter ended June 30, 2024. The Company reported net income of $7.8 million , or $1.35 per diluted share, for the second quarter of 2024, compared to $7.9 million, or $1.36, in the prior quarter, and $15.5 million (GAAP basis), or $8.3 million(1) (as adjusted), and $2.69 (GAAP basis), or $1.43(1) (as adjusted), in the second quarter of 2023. Rick Sowers, President and CEO of the Company and the Bank stated, "We experienced continued strong loan and deposit growth in the second quarter fueled by continued expansion of Relationships and the acquisition of new Clients. Growth came from all geographies of the bank and business lines. We also saw continued traction for our Legal Services and Cross Border verticals as well. The Team continues to bring discipline to our lending which has yielded expanded loan rates and solid Net Interest Income growth." (1) A reconciliation of net income to adjusted net income and diluted earnings per share to adjusted earnings per share is provided on page 13 Sowers added, "We were very pleased to be recognized in the American Banker as one of the top performing banks in the country in our asset class. This recognition reinforces that through an outstanding, hard working and dedicated Team, you create satisfied Clients and Shareholders." "The Company continues to exhibit successful customer acquisition activity despite a challenging interest rate environment. Additionally, the Company is investing in people and infrastructure, including strong risk management, product strategy and innovation needed to support the continued growth of the CalPrivate franchise," said Selwyn Isakow, Chairman of the Board of the Company and the Bank. STATEMENT OF INCOME Net Interest Income Net interest income for the second quarter of 2024 totaled $24.7 million, an increase of $1.9 million or 8.4% from the prior quarter and an increase of $2.0 million or 8.6% from the second quarter of 2023. The increase from the prior quarter was driven primarily by 4.4% growth in interest-earning assets and a 24 basis point increase in asset yields as interest income increased by $2.9 million. Interest income in the second quarter of 2024 included $0.6 million from nonaccrual interest on a loan that was paid off during the quarter, contributing 11 basis points to asset yields. Partially offsetting this was an increase of $1.0 million in interest expense, which resulted from a 7.5% increase in average interest bearing-liabilities and a 1 basis point increase in the cost of interest-bearing liabilities. Net Interest Margin Net interest margin for the second quarter of 2024 was 4.48%, compared to 4.31% for the prior quarter and 4.73% in the second quarter of 2023. The 17 basis point increase in net interest margin from the prior quarter was primarily due to higher yields on loans, which included 11 basis points from nonaccrual interest on a loan that was paid off during the quarter, partially offset by a higher cost on total deposits. The yield on earning assets was 7.02% for the second quarter of 2024 compared to 6.78% for the prior quarter, and the cost of interest-bearing liabilities was 3.78% for the second quarter of 2024 compared to 3.77% in the prior quarter. The cost of total deposits was 2.67% for the second quarter of 2024 compared to 2.61% in the prior quarter. The cost of core deposits, which excludes brokered deposits, was 2.28% in the second quarter of 2024 compared to 2.14% in the prior quarter. The spot rate for total deposits was 2.61% as of June 30, 2024, compared to 2.66% at March 31, 2024. Provision for Credit Losses Provision expense for credit losses for the second quarter of 2024 was $2.1 million, compared to $0.2 million in the prior quarter and a net reversal of $7.1 million for the second quarter of 2023. The increase from the prior quarter was primarily due to the $72.7 million increase in loans HFI and higher reserve rates on commercial real estate loans due to CECL model updates. For more details, please refer to the "Asset Quality" section below. Noninterest Income Noninterest income was $1.5 million for the second quarter of 2024, compared to $1.4 million in the prior quarter and $1.1 million in the second quarter of 2023. SBA loan sales for the second quarter of 2024 were $8.0 million with a 12.16% average trade premium resulting in a net gain on sale of $661 thousand, compared with $8.9 million with a 10.84% average trade premium resulting in a net gain on sale of $681 thousand in the prior quarter. Management expects continued softness in the market for SBA 7a loans. Noninterest Expense Noninterest expense was $13.0 million for the second quarter of 2024, compared to $12.8 million in the prior quarter and $8.8 million in the second quarter of 2023. The efficiency ratio was 49.46% for the second quarter of 2024 compared to 52.84% in the prior quarter and 37.04% in the second quarter of 2023. The decrease in the efficiency ratio from the prior quarter was primarily due to the increase in net interest income described above, while the increase in noninterest expense was relatively modest. 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 $3.3 million for the second quarter of 2024, compared to $3.3 million for the prior quarter. The effective tax rate for the second quarter of 2024 was 29.5%, compared to 29.5% in the prior quarter and 29.7% in the second quarter of 2023. STATEMENT OF FINANCIAL CONDITION As of June 30, 2024, total assets were $2.29 billion, an increase of $97.9 million since March 31, 2024. The increase in assets from the prior quarter was primarily due to higher loans receivable, cash balances and investment securities. Total cash and due from banks was $158.4 million as of June 30, 2024, an increase of $16.9 million or 11.9%, since March 31, 2024, primarily due to funds that were deposited at the end of the quarter and deployed in the following month. Loans HFI totaled $1.98 billion as of June 30, 2024, an increase of $72.7 million or 3.8% since March 31, 2024.  Investment securities available-for-sale ("AFS") were $121.7 million as of June 30, 2024, an increase of $7.7 million or 6.7% since March 31, 2024, as a result of new securities purchased. As of June 30, 2024, the net unrealized loss on the AFS investment securities portfolio, which is comprised mostly of US Treasury and Government Agency debt, was $13.0 million (pre-tax) compared to a loss of $12.4 million (pre-tax) as of March 31, 2024. The average duration of the Bank's AFS portfolio is 3.7 years. The Company has no held-to-maturity securities. Total deposits were $2.00 billion as of June 30, 2024, an increase of $97.1 million since March 31, 2024. During the quarter, core deposits increased by $136.6 million, which was driven by a $95.9 million increase in interest-bearing core deposits (including balances in the Intrafi ICS and CDARS programs) and a $40.8 million increase in noninterest-bearing core deposits. Deposit mix has continued to shift while short-term interest rates remain higher. Noninterest-bearing deposits represent 32.0% of total core deposits. Uninsured deposits, net of collateralized and fiduciary deposit accounts, represent 47.9% of total deposits as of June 30, 2024. As of June 30, 2024, total available liquidity was $1.7 billion or 181.5% of uninsured deposits, net of collateralized and fiduciary deposit accounts. Total available liquidity is comprised of $271 million of on-balance sheet liquidity (cash and investment securities) and $1.5 billion of unused borrowing capacity. Asset Quality and Allowance for Credit Losses ("ACL") As of June 30, 2024, the allowance for loan losses was $26.6 million or 1.34% of loans HFI, compared to $24.7 million or 1.29% as of March 31, 2024. The increase in the coverage ratio from March 31, 2024 primarily reflects updates to the third-party national dataset of historical loss rates used in the commercial real estate lifetime loss rate model. The Company continues to have strong credit metrics and its nonperforming assets are 0.11% of total assets as of June 30, 2024 compared to 0.21% as of March 31, 2024. The reserve for unfunded commitments was $1.9 million as of June 30, 2024, compared to $1.7 million as of March 31, 2024. Given the credit quality of the loan portfolio, management believes we are sufficiently reserved. At June 30, 2024 and March 31, 2024, there are no doubtful credits and classified assets were $10.1 million and $10.8 million, respectively. Total classified assets consisted of eight loans as of June 30, 2024, which included seven loans totaling $7.6 million secured by real estate with a weighted average LTV of 43.4%. The remaining loan was a $2.5 million nonaccrual commercial and industrial loan with a specific reserve of $1.5 million. Capital Ratios (2) The Bank's capital ratios were in excess of the levels established for "well capitalized" institutions and are as follows:   June 30, 2024 (2) March 31, 2024 CalPrivate Bank     Tier I leverage ratio 10.00% 10.08% Tier I risk-based capital ratio 11.23% 11.19% Total risk-based capital ratio 12.48% 12.44% (2)   June 30, 2024 capital ratios are preliminary and subject to change. 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. 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, permit investors to effectively analyze financial trends of our business activities, and 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. Investor Relations Contacts Rick SowersPresident and Chief Executive OfficerPrivate Bancorp of America, Inc., and CalPrivate Bank(424) 303-4894 Cory StewartExecutive Vice President and Chief Financial OfficerPrivate Bancorp of America, Inc., and CalPrivate Bank(206) 293-3669 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 in good faith believe 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)     Jun 30, 2024     Mar 31, 2024     Jun 30, 2023   Assets                   Cash and due from banks   $ 13,545     $ 13,136     $ 23,273   Interest-bearing deposits in other financial institutions     12,502       34,790       27,566   Interest-bearing deposits at Federal Reserve Bank     132,330       93,575       85,020   Total cash and due from banks     158,377       141,501       135,859   Interest-bearing time deposits with other institutions     4,097       4,032       7,661   Investment debt securities available for sale     121,725       114,067       94,574   Loans held for sale     -       383       1,982   Loans, net of deferred fees and costs and unaccreted discounts     1,979,720       1,906,992       1,717,705   Allowance for loan losses     (26,591 )     (24,693 )     (22,588 ) Loans held-for-investment, net of allowance     1,953,129       1,882,299       1,695,117   Federal Home Loan Bank stock, at cost     9,586       8,915       8,915   Right of use asset     4,719       2,765       2,525   Premises and equipment, net     2,207       1,804       1,539   Servicing assets, net     2,164       2,203       2,875   Accrued interest receivable     7,906       7,931       6,118   Other assets     21,774       21,877       19,572   Total assets   $ 2,285,684     $ 2,187,777     $ 1,976,737                       Liabilities and Shareholders' Equity                   Liabilities                   Noninterest bearing   $ 557,055     $ 516,294     $ 657,980   Interest bearing     1,444,671       1,388,381       1,041,192   Total deposits     2,001,726       1,904,675       1,699,172   FHLB borrowings     48,000       53,000       66,000   Other borrowings     17,965       17,963       17,958   Accrued interest payable and other liabilities     16,551       18,107       26,396   Total liabilities     2,084,242       1,993,745       1,809,526                       Shareholders' equity                   Common stock     74,636       74,105       73,379   Additional paid-in capital     3,717       4,108       3,405   Retained earnings     132,179       124,464       100,281   Accumulated other comprehensive (loss) income, net     (9,090 )     (8,645 )     (9,854 ) Total shareholders' equity     201,442       194,032       167,211   Total liabilities and shareholders' equity   $ 2,285,684     $ 2,187,777     $ 1,976,737   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       Jun 30, 2024     Mar 31, 2024     Jun 30, 2023     Jun 30, 2024     Jun 30, 2023   Interest Income                               Loans   $ 35,538     $ 33,006     $ 28,270     $ 68,544     $ 54,498   Investment securities     1,090       979       560       2,069       1,140   Deposits in other financial institutions     2,034       1,799       1,933       3,833       3,083   Total interest income     38,662       35,784       30,763       74,446       58,721                                   Interest Expense                               Deposits     13,040       12,130       6,581       25,170       11,505   Borrowings     952       886       1,474       1,838       2,340   Total interest expense     13,992       13,016       8,055       27,008       13,845                                   Net interest income     24,670       22,768       22,708       47,438       44,876   Provision (reversal) for credit losses     2,136       233       (7,149 )     2,369       (7,076 ) Net interest income after provision for credit losses     22,534       22,535       29,857       45,069       51,952                                   Noninterest income:                               Service charges on deposit accounts     430       388       310       818       658   Net gain on sale of loans     661       681       171       1,342       645   Other noninterest income     447       357       573       804       1,216   Total noninterest income     1,538       1,426       1,054       2,964       2,519                                   Noninterest expense:                               Compensation and employee benefits     8,836       8,861       7,189       17,697       15,219   Occupancy and equipment     822       770       795       1,592       1,601   Data processing     1,183       1,058       878       2,241       1,822   Professional services     424       488       (836 )     912       (398 ) Other expenses     1,697       1,606       776       3,303       2,115   Total noninterest expense     12,962       12,783       8,802       25,745       20,359   Income before provision for income taxes     11,110       11,178       22,109       22,288       34,112   Provision for income taxes     3,283       3,294       6,575       6,577       9,604   Net income   $ 7,827     $ 7,884     $ 15,534     $ 15,711     $ 24,508   Net income available to common shareholders   $ 7,761     $ 7,832     $ 15,407     $ 15,595     $ 24,345                                   Earnings per share                               Basic earnings per share   $ 1.36     $ 1.38     $ 2.72     $ 2.74     $ 4.32   Diluted earnings per share   $ 1.35     $ 1.36     $ 2.69     $ 2.71     $ 4.25                                   Average shares outstanding     5,702,938       5,679,843       5,654,435       5,688,135       5,631,442   Diluted average shares outstanding     5,762,616       5,754,937       5,726,522       5,755,250       5,722,645   PRIVATE BANCORP OF AMERICA, INC.Consolidated average balance sheet, interest, yield and rates(Unaudited)(Dollars in thousands)     For the three months ended       Jun 30, 2024     Mar 31, 2024     Jun 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   $ 152,563     $ 2,034       5.36 %   $ 135,511     $ 1,799       5.34 %   $ 140,939     $ 1,933       5.50 % Investment securities     123,876       1,090       3.52 %     119,690       979       3.27 %     110,332       560       2.03 % Loans, including LHFS     1,939,746       35,538       7.37 %     1,868,308       33,006       7.11 %     1,675,790       28,270       6.77 % Total interest-earning assets     2,216,185       38,662       7.02 %     2,123,509       35,784       6.78 %     1,927,061       30,763       6.40 % Noninterest-earning assets     25,675                   25,469                   32,741               Total Assets   $ 2,241,860                 $ 2,148,978                 $ 1,959,802                                                                       Interest-Bearing Liabilities                                                       Interest bearing DDA, excluding brokered     130,361       463       1.43 %     109,838       441       1.61 %     99,334       364       1.47 % Savings & MMA, excluding brokered     845,856       7,354       3.50 %     765,770       6,421       3.37 %     645,219       3,570       2.22 % Time deposits, excluding brokered     164,714       1,690       4.13 %     155,703       1,583       4.09 %     101,241       719       2.85 % Total deposits, excluding brokered     1,140,931       9,507       3.35 %     1,031,311       8,445       3.29 %     845,794       4,653       2.21 % Total brokered deposits     284,290       3,533       5.00 %     287,885       3,685       5.15 %     155,577       1,928       4.97 % Total Interest-Bearing Deposits     1,425,221       13,040       3.68 %     1,319,196       12,130       3.70 %     1,001,371       6,581       2.64 %                                                         FHLB advances     47,373       581       4.93 %     49,935       614       4.95 %     96,626       1,202       4.99 % Other borrowings     17,966       371       8.31 %     17,962       272       6.09 %     17,971       272       6.07 % Total Interest-Bearing Liabilities     1,490,560       13,992       3.78 %     1,387,093       13,016       3.77 %     1,115,968       8,055       2.90 %                                                         Noninterest-bearing deposits     535,878                   553,541                   655,169               Total Funding Sources     2,026,438       13,992       2.78 %     1,940,634       13,016       2.70 %     1,771,137       8,055       1.82 %                                                         Noninterest-bearing liabilities     16,334                   18,018