Private Bancorp of America, Inc. Announces Strong Net Income and Earnings Per Share for Second Quarter 2025
Second Quarter 2025 Highlights
Net income for the second quarter of 2025 was $10.4 million, compared to $10.6 million in the prior quarter and $7.8 million in the second quarter of 2024. Net income increased 33.5% year over year
Net income for the second quarter of 2025 represents a return on average assets of 1.69% and a return on average tangible common equity of 17.44%
Diluted earnings per share for the second quarter of 2025 was $1.77, compared to $1.80 in the prior quarter and $1.35 in the second quarter of 2024
Core deposits were $2.07 billion as of June 30, 2025, an increase of $22.0 million or 1.1% from March 31, 2025. Core deposits increased $327.6 million or 18.8% year over year. Total deposits were $2.16 billion as of June 30, 2025, a decrease of $29.2 million or 1.3% from March 31, 2025, which included a reduction in brokered deposits of $51.2 million. Total deposits increased 8.1% year over year
Total cost of deposits was 2.08% for the second quarter of 2025, a decrease from 2.22% in the prior quarter and 2.67% in the second quarter of 2024, an improvement of 6.4% quarter over quarter and 22.3% year over year. The spot rate for total deposits was 2.04% as of June 30, 2025, compared to 2.11% at March 31, 2025. Total cost of funding sources was 2.14% for the second quarter of 2025, a decrease from 2.29% in the prior quarter and 2.78% in the second quarter of 2024
Loans held-for-investment ("HFI") totaled $2.08 billion as of June 30, 2025, an increase of $2.4 million or 0.1% from March 31, 2025. Loans HFI increased 5.1% year over year
Net interest margin was 4.94% for the second quarter of 2025, compared to 4.61% in the prior quarter and 4.48% in the second quarter of 2024
Provision for credit losses for the second quarter of 2025 was $1.3 million, compared to $0.3 million for the prior quarter and $2.1 million for the second quarter of 2024. The allowance for loan losses was 1.35% of loans HFI as of June 30, 2025 compared to 1.27% at March 31, 2025
As of June 30, 2025, criticized loans totaled $58.2 million, or 2.79% of total loans, up from $40.8 million, or 1.96% of total loans, in the prior quarter
Tangible book value per share was $42.20 as of June 30, 2025, an increase of $1.91 since March 31, 2025 primarily as a result of strong earnings. Tangible book value per share increased 4.7% quarter-over-quarter and 21.8% year over year.
LA JOLLA, Calif., July 17, 2025 (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, 2025. The Company reported net income of $10.4 million, or $1.77 per diluted share, for the second quarter of 2025, compared to $10.6 million, or $1.80 per diluted share, in the prior quarter, and $7.8 million, or $1.35 per diluted share, in the second quarter of 2024.
Rick Sowers, President and CEO of the Company and the Bank stated, "Earnings continue to be strong as a result of improvement in our deposit base and funding costs as well as an industry leading net interest margin. Although 2025 has been a slower year for loan growth due to economic uncertainty and what we view as unreasonable market loan pricing, we are adding new Relationships across our footprint by delivering Distinctively Different Service and providing Clients with customized Solutions that meet their individual needs. We have onboarded 8 new Relationship focused Team Members this quarter, with more in the pipeline. We are strong believers in the Southern California market, as demonstrated by our new Santa Barbara County office in Montecito, which we anticipate opening in the third quarter."
Sowers added, "The Bank's superior financial performance and industry leading service metrics continue to be recognized by industry publications and our Clients. This recognition reinforces our strategic thinking and our dedication to excellence, innovation, delivering Client-focused banking solutions and enhancing shareholder value:
Top 20 Community Banks in the US for 2025 by American Banker with assets between $2B and $10B in assets and #2 in California
#1 for both Return on Assets (ROA) and Return on Equity (ROE) among banks with less than $5 billion in assets in 2024
#1 SBA 504 Community Bank Lender in the United States
#10 Best U.S. Bank by Bank Director's RankingBanking®
Client Net Promoter Score of 81 (World Class)
Bauer 5 Star Rating
2025 Best 50 OTCQX
"Management has continued to focus on providing clients with a differentiated superior banking experience while producing industry leading shareholder value creation. Client surveys validate superior service levels while financial results remain in the top tier of banks nationally. Outstanding net interest margin and superior efficiency ratios confirm both the bank's unique client relationship strategy, calculated decision making, and the effective operating systems that have resulted from our continuous improvement focus through project management, product evaluation, and technology implementation programs. In preparation for a less certain general economic environment, we have continued to invest in people and technology. We expanded our geographic footprint into Santa Barbara County and added relationship managers throughout Southern California, and management is preparing for and evaluating a wave of newer technologies including AI and risk management tools. In addition, our Team takes pride in continuing to commit their time and the bank's financial support for non-profits in the communities we serve, in gratitude for these organizations' outstanding work to strengthen their communities by improving the lives of those they serve," 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 2025 totaled $30.1 million, an increase of $2.4 million or 8.6% from the prior quarter and an increase of $5.4 million or 22.1% from the second quarter of 2024. The increase from the prior quarter was due to a $1.7 million increase in interest income, which included $0.7 million of nonaccrual interest recognized on loans that were fully satisfied through a foreclosure, and a $0.7 million decrease in interest expense, resulting from a 19 basis point reduction in the cost of interest-bearing liabilities, primarily driven by a 14 basis point decrease in the cost of total deposits.
Net Interest Margin
Net interest margin for the second quarter of 2025 was 4.94%, compared to 4.61% for the prior quarter and 4.48% in the second quarter of 2024. The 33 basis point increase in net interest margin from the prior quarter was primarily due to a higher average yield on loans, which included the effect of an 11 basis point increase in net interest margin due to nonaccrual interest recognized on loans that were fully satisfied through foreclosure, and a decrease in the cost of total funding sources. The yield on interest-earning assets was 6.89% for the second quarter of 2025 compared to 6.70% for the prior quarter, and the cost of interest-bearing liabilities was 2.95% for the second quarter of 2025 compared to 3.14% in the prior quarter. The cost of total deposits was 2.08% for the second quarter of 2025 compared to 2.22% in the prior quarter. The cost of core deposits, which excludes brokered deposits, was 1.94% in the second quarter of 2025 compared to 1.99% in the prior quarter and 2.28% for the second quarter of 2024. The spot rate for total deposits was 2.04% as of June 30, 2025, compared to 2.11% at March 31, 2025.
Provision for Credit Losses
Provision expense for credit losses for the second quarter of 2025 was $1.3 million, compared to $0.3 million in the prior quarter and $2.1 million in the second quarter of 2024. The provision expense for loans HFI for the second quarter of 2025 was $1.7 million, primarily reflecting a $1.1 million increase in the specific reserve for a nonaccrual loan, as well as quarterly adjustments to CECL model inputs stemming from changes in loan risk ratings and a weakening economic outlook for Southern California. This was offset by a $0.4 million reversal for unfunded commitments due to increased line of credit utilization that resulted in lower unfunded commitment balances. For more details, please refer to the "Asset Quality" section below.
Noninterest Income
Noninterest income was $1.7 million for the second quarter of 2025, compared to $1.6 million in the prior quarter and $1.5 million in the second quarter of 2024. U.S. Small Business Administration ("SBA") loan sales for the second quarter of 2025 were $9.5 million with a 10.01% average trade premium resulting in a net gain on sale of $523 thousand, compared with $8.3 million with a 10.86% average trade premium resulting in a net gain on sale of $469 thousand in the prior quarter.
Noninterest Expense
Noninterest expense was $15.7 million for the second quarter of 2025, compared to $14.1 million in the prior quarter and $13.0 million in the second quarter of 2024. The increase in noninterest expense from the prior quarter is primarily due to higher compensation and benefits costs from continued hiring, including a team of bankers in Montecito, as well as elevated professional services expenses related to expanded loan portfolio reviews performed during the quarter as we proactively manage credit risk and the transition to a new Chief Credit Officer. The efficiency ratio was 49.27% for the second quarter of 2025 compared to 47.90% in the prior quarter and 49.46% in the second quarter of 2024. The slight increase in the efficiency ratio from the prior quarter was due to the increase in noninterest expense.
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 $4.4 million for the second quarter of 2025, compared to $4.4 million for the prior quarter. The effective tax rate for the second quarter of 2025 was 29.7%, compared to 29.5% in the prior quarter and 29.5% in the second quarter of 2024.
STATEMENT OF FINANCIAL CONDITION
As of June 30, 2025, total assets were $2.45 billion, a decrease of $28.0 million since March 31, 2025. The decrease in assets from the prior quarter was primarily due to lower cash and due from banks, partially offset by higher investment securities and loans receivable. Our total cash and due from banks decreased to $140.6 million as of June 30, 2025, a decrease of $77.9 million or 35.6% since March 31, 2025, primarily due to purchases of investment securities and a decrease in brokered deposits and borrowings. Investment securities available-for-sale ("AFS") were $188.8 million as of June 30, 2025, an increase of $32.5 million or 20.8% since March 31, 2025, primarily as a result of new securities purchased. As of June 30, 2025, the net unrealized loss on the AFS investment securities portfolio, which is comprised mostly of US Treasury and Government Agency debt, was $9.0 million (pre-tax) compared to a loss of $10.1 million (pre-tax) as of March 31, 2025. The average duration of the Bank's AFS portfolio is 3.9 years. The Company has no held-to-maturity securities. Loans HFI totaled $2.08 billion as of June 30, 2025, an increase of $2.4 million or 0.1% since March 31, 2025, primarily due to growth in investor owned commercial real estate ("CRE") and SBA loans, partially offset by decreased construction and commercial and industrial ("C&I") loan balances.
Total deposits were $2.16 billion as of June 30, 2025, a decrease of $29.2 million since March 31, 2025. During the quarter, core deposits increased by $22.0 million, which was driven by a $19.6 million increase in interest-bearing core deposits (including balances in the IntraFi ICS and CDARS programs) and a $2.4 million increase in noninterest-bearing core deposits. The deposit mix has continued to shift due to short-term interest rates remaining elevated compared to recent years. Noninterest-bearing deposits represent 29.0% of total core deposits. Offsetting the increase to total deposits from core deposits, brokered deposits decreased by $51.2 million. Uninsured deposits, net of collateralized and fiduciary deposit accounts, represent 50.6% of total deposits as of June 30, 2025.
As of June 30, 2025, total available liquidity was $2.1 billion or 194.5% of uninsured deposits, net of collateralized and fiduciary deposit accounts. Total available liquidity is comprised of $321 million of on-balance sheet liquidity (cash and investment securities) and $1.8 billion of unused borrowing capacity.
Asset Quality and Allowance for Credit Losses ("ACL")
As of June 30, 2025, the allowance for loan losses was $28.2 million or 1.35% of loans HFI, compared to $26.4 million or 1.27% of loans HFI as of March 31, 2025. The increase in the coverage ratio from March 31, 2025 is due primarily to a $1.1 million increase in the specific reserve for a nonaccrual loan, as well as quarterly adjustments to CECL model inputs stemming from changes in loan risk ratings and a weakening economic outlook for Southern California. The Company continues to have strong credit metrics and its nonperforming assets are 0.66% of total assets as of June 30, 2025 compared to 0.63% as of March 31, 2025. The reserve for unfunded commitments was $0.9 million as of June 30, 2025, compared to $1.3 million as of March 31, 2025. The decrease in the reserve for unfunded commitments was due to lower unfunded commitment balances (driven by higher credit line usage). Given the credit quality of the loan portfolio, management believes we are sufficiently reserved.
At June 30, 2025 and March 31, 2025, there were no doubtful credits and classified assets were $36.2 million and $27.8 million, respectively. Total classified assets consisted of 26 loans as of June 30, 2025, which included 17 loans totaling $22.5 million secured by real estate with total specific reserves of $1.1 million and a weighted average LTV of 56.6%. The remaining 9 loans were $13.7 million of commercial and industrial loans, one of which was an unsecured loan on nonaccrual status with a carrying value of $1.5 million and a specific reserve of $1.0 million (the loan is recorded net of a $1.1 million partial charge off recorded in the first quarter of 2025).
The Bank's loan portfolio does include assets that are in the affected areas of Los Angeles devastated by wildfires. Of these loans, two relationships with loan balances totaling $34.1 million have been placed on payment deferral. However, based on assessments performed to date, management does not believe there is a material impact to the financial statements.
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, 2025 (2)
March 31, 2025
CalPrivate Bank
Tier I leverage ratio
10.70%
10.35%
Tier I risk-based capital ratio
12.12%
11.75%
Total risk-based capital ratio
13.37%
13.00%
(2) June 30, 2025 capital ratios are preliminary and subject to change.
CalPrivate Bank Announces Board of Directors Changes
During the second quarter, Thomas Wornham and Richard Smith concluded their service on the Bank's Board of Directors. The Bank extends its sincere gratitude to Mr. Wornham and Mr. Smith for their contributions and dedication during their tenure. Neither individual served on the Company's Board of Directors. Mr. Smith continues his business development activities for the Bank.
About Private Bancorp of America, Inc. (OTCQX:PBAM)
PBAM is the holding company for CalPrivate Bank, which operates offices in Coronado, San Diego, La Jolla, Newport Beach, El Segundo, Beverly Hills, and coming soon, Montecito, as well as through efficient digital banking services. CalPrivate Bank is driven by its core values of building client Relationships based on superior funding Solutions, unparalleled Service, and mutual Trust. The Bank caters to high-net-worth individuals, professionals, closely-held businesses, and real estate entrepreneurs, delivering a Distinctly Different™ personalized banking experience while leveraging cutting-edge technology to enhance our clients' evolving needs. CalPrivate Bank is in the top tier of customer service survey ratings in the nation, scoring almost 3x higher than the median domestic bank. The Bank offers comprehensive deposit and treasury services, rapid and creative loan options including various portfolio and government-guaranteed lending programs, cross border banking, and innovative, unique technologies that drive enhanced client performance. CalPrivate Bank has been recognized by Bank Director's RankingBanking® as the 10th best bank in the country and the #1 bank in its asset class for both return on assets (ROA) and return on equity (ROE). CalPrivate Bank was also ranked in the top 5% of banks in the U.S. with assets between $2B and $10B by American Banker. Additionally, CalPrivate Bank is a Bauer Financial 5-star rated bank, an SBA Preferred Lender, and has been honored as Community Bank 504 Lender of the Year by the NADCO Community Impact Awards, exemplifying excellence in the banking industry. These prestigious rankings highlight the Bank's commitment to delivering exceptional banking services and setting new industry standards.
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 efficiency ratio, pretax pre-provision net revenue, average tangible common equity and 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, to permit investors to effectively analyze financial trends of our business activities, and to 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 believe in good faith 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, 2025
Mar 31, 2025
Jun 30, 2024
Assets
Cash and due from banks
$
26,215
$
34,720
$
13,545
Interest-bearing deposits in other financial institutions
14,715
16,155
12,502
Interest-bearing deposits at Federal Reserve Bank
99,689
167,606
132,330
Total cash and due from banks
140,619
218,481
158,377
Interest-bearing time deposits with other institutions
4,270
4,213
4,097
Investment debt securities available for sale
188,821
156,346
121,725
Loans held for sale
8,826
2,066
-
Loans, net of deferred fees and costs and unaccreted discounts
2,081,063
2,078,653
1,979,720
Allowance for loan losses
(28,178
)
(26,437
)
(26,591
)
Loans held-for-investment, net of allowance
2,052,885
2,052,216
1,953,129
Federal Home Loan Bank stock, at cost
10,652
9,586
9,586
Operating lease right of use assets
7,254
6,383
4,719
Premises and equipment, net
2,213
2,432
2,207
Servicing assets, net
1,964
1,993
2,164
Accrued interest receivable
8,624
8,148
7,906
Other assets
28,752
21,009
21,774
Total assets
$
2,454,880
$
2,482,873
$
2,285,684
Liabilities and Shareholders' Equity
Liabilities
Noninterest bearing
$
601,473
$
599,095
$
557,055
Interest bearing
1,561,407
1,593,014
1,444,671
Total deposits
2,162,880
2,192,109
2,001,726
FHLB borrowings
11,000
16,000
48,000
Other borrowings
17,972
17,970
17,965
Accrued interest payable and other liabilities
16,089
21,559
16,551
Total liabilities
2,207,941
2,247,638
2,084,242
Shareholders' equity
Common stock
76,398
76,156
74,636
Additional paid-in capital
4,009
3,712
3,717
Retained earnings
172,849
162,462
132,179
Accumulated other comprehensive (loss) income, net
(6,317
)
(7,095
)
(9,090
)
Total shareholders' equity
246,939
235,235
201,442
Total liabilities and shareholders' equity
$
2,454,880
$
2,482,873
$
2,285,684
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, 2025
Mar 31, 2025
Jun 30, 2024
Jun 30, 2025
Jun 30, 2024
Interest Income
Loans
$
38,004
$
36,565
$
35,538
$
74,569
$
68,544
Investment securities
1,800
1,505
1,090
3,305
2,069
Deposits in other financial institutions
2,184
2,198
2,034
4,382
3,833
Total interest income
41,988
40,268
38,662
82,256
74,446
Interest Expense
Deposits
11,376
11,899
13,040
23,275
25,170
Borrowings
499
637
952
1,136
1,838
Total interest expense
11,875
12,536
13,992
24,411
27,008
Net interest income
30,113
27,732
24,670
57,845
47,438
Provision for credit losses
1,293
299
2,136
1,592
2,369
Net interest income after provision for credit losses
28,820
27,433
22,534
56,253
45,069
Noninterest income:
Service charges on deposit accounts
591
557
430
1,148
818
Net gain on sale of loans
523
469
661
992
1,342
Other noninterest income
616
587
447
1,203
804
Total noninterest income
1,730
1,613
1,538
3,343
2,964
Noninterest expense:
Compensation and employee benefits
10,319
9,748
8,836
20,067
17,697
Occupancy and equipment
840
844
822
1,684
1,592
Data processing
1,396
1,326
1,183
2,722
2,241
Professional services
939
508
424
1,447
912
Other expenses
2,195
1,629
1,697
3,824
3,303
Total noninterest expense
15,689
14,055
12,962
29,744
25,745
Income before provision for income taxes
14,861
14,991
11,110
29,852
22,288
Provision for income taxes
4,412
4,429
3,283
8,841
6,577
Net income
$
10,449
$
10,562
$
7,827
$
21,011
$
15,711
Net income available to common shareholders
$
10,361
$
10,482
$
7,761
$
20,834
$
15,595
Earnings per share
Basic earnings per share
$
1.80
$
1.83
$
1.36
$
3.63
$
2.74
Diluted earnings per share
$
1.77
$
1.80
$
1.35
$
3.57
$
2.71
Average shares outstanding
5,754,872
5,734,688
5,702,938
5,744,836
5,688,135
Diluted average shares outstanding
5,837,537
5,826,229
5,762,616
5,830,897
5,755,250
PRIVATE BANCORP OF AMERICA, INC.Consolidated average balance sheet, interest, yield and rates(Unaudited)(Dollars in thousands)
For the three months ended
Jun 30, 2025
Mar 31, 2025
Jun 30, 2024
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
$
191,701
$
2,184
4.57
%
$
202,907
$
2,198
4.39
%
$
152,563
$
2,034
5.36
%
Investment securities
182,772
1,800
3.94
%
157,747
1,505
3.82
%
123,876
1,090
3.52
%
Loans, including LHFS
2,069,415
38,004
7.37
%
2,078,588
36,565
7.13
%
1,939,746
35,538
7.37
%
Total interest-earning assets
2,443,888
41,988
6.89
%
2,439,242
40,268
6.70
%
2,216,185
38,662
7.02
%
Noninterest-earning assets
43,336
28,536
25,675
Total Assets
$
2,487,224
$
2,467,778
$
2,241,860
Interest-Bearing Liabilities
Interest bearing DDA, excluding brokered
242,929
814
1.34
%
244,301
970
1.61
%
130,361
463
1.43
%
Savings & MMA, excluding brokered
1,002,820
7,130
2.85
%
955,259
6,830
2.90
%
845,856
7,354
3.50
%
Time deposits, excluding brokered
218,900
2,097
3.84
%
196,375
1,956
4.04
%
164,714
1,690
4.13
%
Total deposits, excluding brokered
1,464,649
10,041
2.75
%
1,395,935
9,756
2.83
%
1,140,931
9,507
3.35
%
Total brokered deposits
120,935
