Pan Pacific Bank Announces Recapture of $2.7M Income Related to DTA, Plans for New Branch in San Jose, CA

FREMONT, Calif., July 14, 2014 /PRNewswire/ -- Pan Pacific Bank (OTCBB: PPFC) today announced its unaudited financial results for the quarter ended June 30, 2014, including total assets of $110.3 million, net loans of $82.7 million and deposits of $88.3 million. "Pan Pacific Bank is pleased to report continued positive earnings with net after-tax earnings for the three and six months ending June 30, 2014, of $2,852,637 and $2,926,602, respectively," said Wayne Doiguchi, Pan Pacific Bank's CEO. "During the quarter, Bank management determined that it is more likely than not that the deferred tax asset (DTA) will be realized. Therefore, the second quarter tax expense includes a benefit or income of $2,740,245 related to the reversal of the valuation allowance for deferred tax assets."

Doiguchi added: "The Bank has now been profitable for 10 consecutive quarters with core pre-tax earnings of $114,492 and $190,557 for the three and six months ended June 30, 2014, respectively. We are also very pleased to announce continued growth in loans from year-end 2013 while maintaining very strong asset quality and capital levels."

Doiguchi also noted: "Our loan pipeline has been building and resulted in significant loan growth for the year. The decrease in deposits is driven primarily by balance sheet strategies to reduce interest expense associated with high-cost certificates of deposit."  

"We are heading into our first franchise expansion with a de novo branch office in San Jose, California," said Doiguchi. "We have three seasoned Relationship Managers on board as well as a signed lease and regulatory approval in hand. We expect to be open for business at the new location late in the third quarter. With nearly one-third of our loan portfolio commitments originating from this area, we plan to use our physical presence to reach out to the community and be an active participant in its vibrant business climate."

Effective July 15, 2014, Mr. Richard "Dick" Hagarty will join the Bank as Chief Credit Officer, replacing Mr. Reilly Shaughnessy who resigned to return to the San Diego area. Mr. Hagarty, a well-known and respected banker, brings many years of experience as not only a Chief Credit Officer in the community bank space, but he also has a familiarity with Pan Pacific Bank's primary and secondary market areas. Said Doiguchi, "We look forward to Dick being an integral part of our growth strategies."    

The following are Bank highlights for the quarter ended June 30, 2014:

- Year-over-year Tangible Book Value increased from $2.94 to $3.56 per share.
- Year-over-year total assets increased $4 million or 3.8%.
- Year-over-year net loans increased $3.6 million or 4.6% and increased $6.5 million or 8.5% from year end.
- Year-over-year total deposits decreased $3.2 million or 3.5% and decreased $2.7 million or 3% from year end.
- For the six months ending June 30, 2014, recoveries, net of charge offs were $6.5 thousand.  
- At June 30, 2014, non-performing loans were $415 thousand or 0.49% as a percent of total gross loans and 0.38% as a percent of total assets.
- Regulatory capital ratios remained strong at 17.60%, 16.34% and 14.03% for Total Risked Based, Tier 1 Risk Based and Tier 1 Leverage, respectively.
- Positive net earnings of $2.9 million or $0.57 per diluted share for the three months ended June 30, 2014, compared to $39 thousand or $0.008 per diluted share for the same period in 2013.
- Year-over-year, reduced the cost of interest bearing deposits and cost of funds by 26 basis points and 22 basis points, respectively.
- For the quarter ended June 30, 2014, maintained a very favorable Net Interest Margin of 4.06%.

Stockholders' equity increased $3.1 million, or 21.7%, to $17.6 million at June 30, 2014, compared with $14.5 million at December 31, 2013.  This increase was due to earnings of $2,927 thousand, $66 thousand in stock option related items, plus $155 thousand net change in other comprehensive income. Tangible book value was $3.56 at June 30, 2014, and $2.94 at December 31, 2013.

About Pan Pacific Bank
Pan Pacific Bank is focused on meeting the banking needs of business and individuals in Alameda and Santa Clara counties, its primary service areas. The Bank was founded in  2005 and is headquartered at 47065 Warm Springs Blvd, Fremont, California. The Bank is an SBA / USDA lender and offers a variety of banking products to include loans, deposits, remote capture, and other cash management services. For information concerning this press release, please contact Wayne Doiguchi, CEO or Margaret A. Torres, CFO at 510 809 8888.
Our web address is www.panpacificbank.com.

Forward-Looking Statements

This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include, but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in our primary service area and more generally in California and other factors beyond the bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. Pan Pacific Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

For information concerning this press release,
please contact Wayne Doiguchi, CEO or
Margaret A. Torres, CFO at 510-809-8888.

SOURCE Pan Pacific Bank