Plaza Bancorp, the Holding Company of Plaza Bank, Announces Financial Results for the Quarter Ended March 31, 2016 (unaudited)

IRVINE, CA--(Marketwired - May 4, 2016) - Plaza Bancorp (OTCBB: PLZZ) (the "Company"), the holding company of Plaza Bank (the "Bank"), reported unaudited net income for the quarter ended March 31, 2016 of $2.3 million or $0.08 per share on a diluted basis. For the quarter ended March 31, 2015, the unaudited net loss using the pooling of interest method as a result of the Company's merger with Manhattan Bancorp on June 26, 2015, was ($207,000) or ($0.01) per share on a diluted basis. For the quarter ended March 31, 2016, the Company's return on average assets was 0.89% and return on average equity was 8.53%, up from a return on average assets of (0.08%) and a return on average equity of (2.29%) for the comparable period in 2015.

Gene Galloway, President and Chief Executive Officer of the Company and the Bank, commenting on the Bank's progress, stated, "With the demands of the merger integration behind us, the Bank's personnel for the last two quarters have been focused on building and retaining customer relationships. Through these individuals efforts our loans held for investment have grown 21.5% on an annualized basis, or $89 million, over the last six months. Our loan interest income increased 14.8% on an annualized basis, or $463,000, in the first quarter of 2016 over the fourth quarter of 2015. Furthermore, our loan quality remains excellent with non-accrual loans and loans over 30 days past due as of March 31, 2016 being 0.1% and 0.2% of the Bank's loans held for investment, respectively."

Mr. Galloway concluded by stating, "With our loan origination platform performing strongly, we are now focusing on building our branch brand and our deposit base to support our strong loan pipeline."

Highlights for quarter ended March 31, 2016 included:

• Loan originations by the Bank in the first quarter totaled $86.6 million
• Loans held for investment grew $36.2 million, or 16.4% annualized, to $918.4 million during the first quarter 
• The Company's loans held for investment to deposit ratio as of March 31, 2016 was 103.5%
• During the quarter, the Company realized a gain of $732,000 on the sale of $10.5 million of SBA 7(a) loans
• For the quarter, the Company's net interest margin ("NIM") improved 21 points to 4.71% compared to the quarter ended December 31, 2015 
• Non-accrual loans totaled $1.0 million or 0.11% of the loans held for investment at March 31, 2016
• The ratio of allowance for loan losses to total loans held for investment was 1.32% at March 31, 2016. Including the $2.5 million credit discount on acquired loans in the ratio, the ratio increases to 1.59%
• The Company's efficiency ratio for the quarter was 68%
• Tangible book value per diluted share increased 9 cents to $3.31 during the first quarter.
  
  

Net interest income for the quarter ended March 31, 2016 totaled $11.7 million. Loan interest income totaled $13.0 million, the average of total outstanding loans for the quarter was $896.8 million and the annualized yield was 5.81%. Interest expense related to deposits was $961,000 for the quarter, or 44 basis points annualized. The interest expense related to the subordinated debentures for the quarter was $453,000, or 7.245% annualized.

The Company recorded a $587,000 provision for loan losses during the first quarter of 2016 principally as a result of the $36.2 million loan growth. Net recoveries for the period totaled $8,000. Non-accrual loans totaled $1.0 million at March 31, 2016. 

Non-interest income for the first quarter of 2016 was $2.3 million. Non-interest income for the first quarter is primarily comprised of net gain from the sale of loans of $732,000, loan servicing income of $372,000, deposit fee income of $305,000, loan referral fee income of $169,000 and other fee income totaling $419,000.

Non-interest expense totaled $9.7 million for the first quarter of 2016. Compensation and benefits comprises 64.6%, or $6.3 million, of the total non-interest expense. The Company had 156 full-time equivalent employees as of March 31, 2016.

For the first quarter of 2016, the Company's effective tax rate was 36.8% for a total tax expense of $1.4 million for the quarter. In the first quarter, the Company recognized a $151,000 tax benefit from an adjustment of the prior year's taxes.

At March 31, 2016, the Company's ratio of tangible common equity to total assets was 9.12%, with a tangible book value of $3.31 per diluted share and a diluted book value per share of $3.65 per share.

At March 31, 2016, the Bank exceeded all regulatory capital requirements with a ratio for tier 1 leverage capital of 10.85%, common equity tier 1 risk-based capital of 11.50%, tier 1 risked-based capital of 11.50% and total risk-based capital of 12.75%. These capital ratios exceeded the "well capitalized" standards defined by the federal banking regulators of 5.00% for tier 1 leverage capital, 6.5% for common equity tier 1 risk-based capital, 8.00% for tier 1 risk-based capital and 10.00% for total risk-based capital. At March 31, 2016, the Company had a ratio for tier 1 leverage capital of 8.96%, common equity tier 1 risk-based capital of 9.49%, tier 1 risk-based capital of 9.49% and total risk-based capital of 13.29%.

Plaza Bancorp		3/31/2016		12/31/2015
	Tier 1 leverage ratio	8.96%		8.56%
	Tier 1 risk-based capital ratio	9.49%		9.35%
	Common equity tier 1 capital ratio	9.49%		9.35%
	Risk-based capital ratio	13.29%		13.24%
Plaza Bank
	Tier 1 leverage ratio	10.85%		10.48%
	Tier 1 risk-based capital ratio	11.50%		11.44%
	Common equity tier 1 capital ratio	11.50%		11.44%
	Risk-based capital ratio	12.75%		12.70%

About Plaza Bancorp

Plaza Bancorp is the holding company of Plaza Bank. Plaza Bank is a full service community bank serving the business and professional communities in Southern California and Southern Nevada. The Bank is committed to meeting the financial needs of small to middle market businesses and professional firms with loans for working capital, equipment and owner-occupied commercial real estate financing and a full array of cash management services. Plaza Bank meets its customers' needs through its eight regional offices located in the cities of El Segundo, Glendale, Irvine, Las Vegas, Manhattan Beach, Montebello, Pasadena and San Diego. For more information, visit www.plazabank.com or call President and CEO Gene Galloway at [phone] or [phone].

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by that Act. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are based on currently available information, expectations, assumptions, projections, and management's judgment about the Company, the Bank, the banking industry and general economic conditions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.

Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that might cause such differences include, but are not limited to: the Bank's ability to successfully execute its business plans and achieve its objectives; changes in general economic, real estate and financial market conditions, either nationally or locally in areas in which the Bank conducts its operations; changes in interest rates; new litigation or claims or changes in existing litigation or claims; future credit loss experience; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Bank's operations or business; loss of key personnel; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; and the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulation on internal control.

Plaza Bancorp
Consolidated Condensed Statements of Financial Condition
(Unaudited)
(dollars in thousands)				March 31,				December 31,				March 31,
ASSETS				2016				2015				2015 *
Cash and cash equivalents				$	78,801			$	97,576			$	105,518
Investment securities - available for sale					29,505				28,215				39,836
Loans held for sale					5,033				4,535				44,756
Loans held for investment					918,442				882,199				823,949
Allowance for possible credit losses					(12,101	)			(11,506	)			(9,691	)
Net loans held for investment					906,341				870,693				814,258
Goodwill and other intangibles					12,267				12,411				19,365
Idemnification asset					631				762				1,685
Accrued interest and other assets					35,920				36,540				40,104
TOTAL ASSETS				$	1,068,498			$	1,050,732			$	1,065,522
LIABILITIES AND EQUITY
Deposits
	Noninterest-bearing demand			$	270,810			$	316,516			$	298,401
	Savings, now and money market accounts				402,068				355,515				360,390
	Time deposits				214,930				211,998				228,594
		Total Deposits			887,808				884,029				887,385
Borrowings					61,704				48,696				34,613
Accrued interest and other liabilities					9,288				10,738				11,667
		Total Liabilities			958,800				943,463				933,665
Total stockholders' equity for Plaza Bancorp					109,698				107,269				125,405
Non controlling interest in Plaza Bank					-				-				6,452
Total Equity					109,698				107,269				131,857
TOTAL LIABILITIES AND EQUITY				$	1,068,498			$	1,050,732			$	1,065,522
BASIC BOOK VALUE PER DILUTED SHARE				$	3.62			$	3.54			$	4.28
TANGIBLE BOOK VALUE PER DILUTED SHARE				$	3.31			$	3.22			$	3.94
BASIC SHARES OUTSTANDING AT PERIOD END					30,034,244				30,034,244				29,434,212
DILUTED SHARES OUTSTANDING AT PERIOD END					30,262,209				30,296,867				30,843,255

Capital Ratios End of Period:
	Tier 1 leverage ratio	8.96	%	8.56	%
	Tier 1 risk-based capital ratio	9.49	%	9.35	%
	Common equity tier 1 capital ratio	9.49	%	9.35	%
	Risk-based capital ratio	13.29	%	13.24	%
*Pooling of Interest with Manhattan Bancorp

Plaza Bancorp
Consolidated Condensed Statements of Operations
For the Quarter
(Unaudited)
		March 31,				December 31,				March 31,
		2016				2015				2015 *
(dollars in thousands)
Interest income		$	13,183			$	12,722			$	12,788
Interest expense			1,490				1,429				1,069
	Net Interest Income		11,693				11,293				11,719
Provisions for loan losses			587				1,428				261
Net interest income after
	Provisions for Loan Losses		11,106				9,865				11,458
Noninterest income			2,286				3,043				1,936
Noninterest expense			9,712				8,791				11,014
Income before income taxes			3,680				4,117				2,380
Provisions for income taxes			1,356				723				815
Income from continuing operations			2,324				3,394				1,565
Gain (loss) on discontinued operations			-				4				(1,772	)
Net income before noncontrolling interest in Plaza Bank			2,324				3,398				(207	)
Less: Net income attributed to noncontrolling interst in Plaza Bank			-				-				(166	)
Net income (loss)		$	2,324			$	3,398			$	(373	)
EARNINGS (LOSS) PER SHARE - BASIC		$	0.08			$	0.11			$	(0.01	)
EARNINGS (LOSS) PER SHARE - DILUTED		$	0.08			$	0.11			$	(0.01	)
BASIC WEIGHTED AVERAGE SHARES			30,034,244				30,038,188				29,434,212
DILUTED WEIGHTED AVERAGE SHARES			30,262,209				30,293,267				30,843,255
RETURN ON AVERAGE ASSETS			0.89	%			1.30	%			-0.14	%
RETURN ON AVERAGE EQUITY			8.53	%			12.83	%			-1.15	%
*Pooling of Interest with Manhattan Bancorp

Plaza Bancorp
Loans Held for Investment Portfolio Composition
	March 31,				December 31,				March 31,
	2016				2015				2015 *
(dollars in thousands)
Construction and land development	$	11,960			$	12,906			$	9,381
Commercial real estate and other		558,048				522,739				490,636
Commercial		167,381				162,485				173,699
Residential real estate		130,106				131,051				100,403
Consumer		59,566				56,656				53,914
Deferred loan fees and discounts, net of costs		(3,586	)			(3,638	)			(4,084	)
Total		923,475				882,199				823,949
Allowance for loan losses		(12,101	)			(11,506	)			(9,691	)
Total net loans	$	911,374			$	870,693			$	814,258
*Pooling of Interest with Manhattan Bancorp
	Non-Performing Assets
	March 31,				December 31,				March 31,
	2016				2015				2015 *
(dollars in thousands)
Non-Accrual Assets
Loans	$	1,014			$	1,236			$	3,440
OREO		206				206				206
Delinquency Loans
30 - 89 Days past due	$	1,757			$	3,487			$	2,709
90 days and greater		2				109				109
*Pooling of Interest with Manhattan Bancorp

Media Contacts:
Gene Galloway
President and Chief Executive Officer
[phone] or [phone]
Email Contact

John Shindler
Executive Vice President and Chief Financial Officer
[phone]
Email Contact