PACIFIC STATE BANCORP 
By The increased level of provision for loan losses is attributable to lower real estate values and the general economic environment of the region where the Company operates. Other real estate expense is primarily the result of decreasing prices experienced in the market for the type of other real estate the Bank currently owns, and the costs associated with marketing and selling those properties. Increased professional costs are primarily the result of increased legal fees associated with the collection of loans.
In the first quarter of 2009 compared to the fourth quarter of 2008, the Company experienced an improvement in net interest margin. The improvement quarter over quarter was primarily a result of decreased funding costs. The net interest margin improved from 3.38% in the fourth quarter of 2008 to 3.70% in the first quarter of 2009. Funding costs decreased from 3.23% in the fourth quarter of 2008 to 2.84% in the first quarter of 2009.
The Company has experienced a slight decrease in nonperforming loans from
The Company has been successful at liquidating
Despite the loss reported for the first quarter of 2009, Pacific State Bancorp has increased loan loss reserves from 1.95% of gross loans at
The Company's financial performance information for the three month period ending
Income Statement:
-- Total Interest Income: $5,552,000, a decrease of $1,749,000 or 24%
-- Total Interest Expense: $2,227,000, a decrease of $1,155,000 or 34%
-- Net Interest Income: $3,325,000, a decrease of $594,000 or 15%
-- Non-Interest Income : $379,000, a decrease of $93,000 or 20%
-- Non-Interest Expense: $3,297,000, an increase of $802,000 or 32%
-- Provision for Loan Losses: $972,000, an increase of $762,000 or 363%
-- Net Loss: $294,000, a decrease of $1,388,000 from net income of
$1,094,000
-- Basic Loss Per Share: $0.08, a decrease of $0.38 per share from earnings
of $0.30
-- Diluted Loss Per Share: $0.08, a decrease of $0.35 per share from
earnings of $0.27
-- Loss on Average Assets: Annualized loss rate of 0.29%, a decrease of
1.32% from earnings of 1.03%
-- Loss on Average Equity: Annualized loss rate of 4.30%, a decrease of
17.01% from earnings of 12.71%
The Company's balance sheet information as of
-- Total Federal Funds and Investment Securities: $48,875,000, a decrease
of $12,674,000 or 21%
-- Net Loans: $297,784,000, a decrease of $4,161,000 or 1%
-- Total Assets: $400,710,000, a decrease of $20,743,000 or 5%
-- Non-Interest Bearing Deposits: $58,005,000, a decrease of $11,869,000 or
17%
-- Total Deposits: $320,783,000, a decrease of $20,197,000 or 6%
-- Total Borrowings: $48,764,000, remained unchanged
-- Total Shareholders' Equity: $26,950,000, a decrease of $334,000 or
1%
-- Total Tier 1 Risk Based Capital Ratio of 10.48%
-- Total Tier 1 Leverage Capital Ratio of 9.08%
-- Total Risk Based Capital Ratio of 11.74%
Attached are certain unaudited financial statements supporting the financial information summarized above. Further inquiries should be directed to Mr. Simas at 209-870-3214, or by mail to P.O. Box 1649,
SAFE HARBOR: Except for historical information contained herein, the statements contained in this press release include forward-looking statements within the meaning of the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those set forth in or implied by forward-looking statements. These risks are described from time to time in Pacific State Bancorp's Securities and Exchange Commission filings, including its Annual Reports on Form 10-K, quarterly reports on Form 10-Q and Current Reports on Form 8-K. Pacific State Bancorp disclaims any intent or obligation to update these forward-looking statements.
PACIFIC STATE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited March 31, December 31,
(Dollars in thousands) 2009 2008
-------- ------------
ASSETS
Cash and due from banks $11,308 $16,700
Federal funds sold 9,455 21,811
------- -------
Total cash and cash equivalents 20,763 38,511
Interest bearing deposits at
other banks - -
Investment securities 39,420 39,738
Loans, less allowance for loan
losses of $6,406 in 2009 and
$6,019 in 2008 297,784 301,945
Premises and equipment, net 16,974 16,811
Other real estate owned 2,878 2,029
Company owned life insurance 6,820 6,751
Accrued interest receivable and
other assets 16,071 15,668
------- -------
Total assets $400,710 $421,453
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits:
Non-interest bearing $58,005 $69,874
Interest bearing 262,778 271,106
------- -------
Total deposits 320,783 340,980
Other borrowings 40,000 40,000
Subordinated debentures 8,764 8,764
Accrued interest payable and
other liabilities 4,213 4,425
------- -------
Total liabilities 373,760 394,169
------- -------
Shareholders' equity:
Preferred stock - 2,000,000
shares authorized; none issued
or outstanding - -
Common stock - no par value;
24,000,000 shares authorized;
issued and outstanding
-3,719,198 shares in 2009 and
3,715,598 shares in 2008 10,781 10,767
Retained earnings 18,520 18,814
Accumulated other comprehensive
loss, net of taxes (2,351) (2,297)
------- -------
Total shareholders' equity 26,950 27,284
------- -------
Total liabilities and
shareholders' equity $400,710 $421,453
======== ========
PACIFIC STATE BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
Unaudited Three Months Ended
March 31,
------------------
(Dollars in thousands) 2009 2008
---- ----
Interest income:
Interest and fees on loans $5,024 $6,476
Interest on Federal funds sold 16 115
Interest on investment securities 512 710
----- -----
Total interest income 5,552 7,301
----- -----
Interest expense:
Interest on deposits 1,837 2,798
Interest on borrowings 306 430
Interest on subordinated debentures 84 154
----- -----
Total interest expense 2,227 3,382
----- -----
Net interest income before provision for
loan losses 3,325 3,919
Provision for loan losses 972 210
----- -----
Net interest income after provision for
loan losses 2,353 3,709
----- -----
Non-interest income:
Service charges 164 237
Gain on sale of loans 12 19
Other income 203 216
----- -----
Total non-interest income 379 472
----- -----
Non-interest expenses:
Salaries and employee benefits 1,154 1,268
Occupancy 279 263
Furniture and equipment 268 179
Other real estate 431 -
Other expenses 1,165 785
----- -----
Total non-interest expenses 3,297 2,495
----- -----
(Loss) income before (benefit) provision
for income taxes (565) 1,686
(Benefit) provision for income taxes (271) 592
----- -----
Net (loss) income $(294) $1,094
===== ======
Basic (loss) earnings per share $(0.08) $0.30
===== ======
Diluted (loss) earnings per share $(0.08) $0.27
===== ======
PACIFIC STATE BANCORP
Yield Analysis
---------------------
For Three Months Ended March 31,
--------------------------------
(Dollars in thousands) 2009 2008
---------------------------- ---------------------------
Interest
Interest Average Income Average
Average Income or Yield or Average or Yield or
Balance Expense Cost Balance Expense Cost
Assets: ------- ------- -------- ------- ------- --------
Interest
-earning
assets:
Loans $306,195 $5,024 6.65% $321,423 $6,476 8.10%
Investment
securities 41,444 512 5.01% 48,044 704 5.89%
Federal
funds
sold 16,518 16 0.39% 13,167 115 3.51%
Interest
Bearing
Deposits
in Banks - - - 3,000 6 0.80%
------- ------ ------ -----
Total
average
earning
assets $364,157 $5,552 6.18% $385,634 $7,301 7.61%
Non-earning
assets:
Cash and due
from banks 12,136 12,944
Bank premises
and equipment 19,257 14,458
Other assets 20,017 16,104
Allowance for
loan loss (6,243) (4,009)
------ ------
Total average
assets $409,324 $425,131
======== ========
Liabilities and
Shareholders'
Equity:
Interest-bearing
liabilities:
Deposits
Interest
-bearing
Demand $70,837 $211 1.21% $69,081 $389 2.26%
Savings 9,537 21 0.89% 5,359 7 0.53%
Time
Deposits 188,494 1,605 3.45% 200,610 2,402 4.82%
Other
borrowing 48,775 390 3.24% 49,116 584 4.78%
------- ------ ------ -----
Total
average
interest
-bearing
liabilities $317,643 $2,227 2.84% $324,166 $3,382 4.20%
Noninterest
-bearing
liabilities:
Demand
deposits 59,424 61,640
Other
liabilities 4,500 4,708
------ ------
Total
average
liabilities 381,567 390,514
Shareholders'
equity 27,757 34,617
------ ------
Total average
liabilities
and
shareholders'
equity $409,324 $425,131
======== ========
Net interest
income $3,325 $3,919
====== ======
Net interest
margin 3.70% 4.09%
PACIFIC STATE BANCORP
Yield Analysis
---------------------
For Three Months Ended
(Dollars in thousands) December 31, 2008
----------------------
Interest Average
Average Income or Yield or
Assets: Balance Expense Cost
------- ------- -------
Interest-earning assets:
Loans $315,026 $5,567 7.03%
Investment securities 43,410 190 1.74%
Federal funds sold 20,434 35 0.68%
Interest Bearing Deposits in Banks 2 - 0.00%
-------- ------
Total average earning assets $378,872 $5,792 6.08%
Non-earning assets:
Cash and due from banks 13,780
Bank premises and equipment 16,714
Other assets 17,920
Allowance for loan loss (4,918)
--------
Total average assets $422,368
========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits
Interest-bearing Demand $76,428 $403 2.10%
Savings 7,603 20 1.05%
Time Deposits 187,862 1,757 3.72%
Other borrowing 44,728 392 3.49%
------- -----
Total average interest-bearing
liabilities $316,621 $2,572 3.23%
Noninterest-bearing liabilities:
Demand deposits 67,628
Other liabilities 4,773
------
Total average liabilities 389,022
Shareholders' equity 33,346
------
Total average liabilities and
shareholders' equity $422,368
========
Net interest income $3,220
======
Net interest margin 3.38%
SOURCE Pacific State Bank
