First PacTrust Bancorp, Inc. Announces 3rd Quarter 2012 Results

First PacTrust Bancorp, Inc. Announces 3rdQuarter 2012 Results

IRVINE, Calif.--(BUSINESS WIRE)-- First PacTrust Bancorp (NAS: BANC) ("First PacTrust" or the "Company"), the holding company for Pacific Trust Bank and Beach Business Bank, today announced results for the quarter and the nine months ended September 30, 2012. For the quarter, the Company reported net income of $9.5 million and net income available to common shareholders of $9.2 million, or $0.79 per share. For the nine months ended September 30, 2012, the Company reported net income of $9.2 million and net income available to common shareholders of $8.1 million, or $0.70 per share.

During the third quarter, the Company completed its acquisitions of Beach Business Bank and Gateway Business Bank. Transaction-related costs and severance payments related to executive management departures during the period resulted in approximately $4.2 million in expense recognized during the third quarter of 2012. The Company recognized a preliminary bargain purchase gain of $12.1 million related to the Gateway Business Bank acquisition and recorded goodwill of $7.1 million related to the Beach Business Bank acquisition during the third quarter of 2012. In conjunction with these acquisitions, the Company also recorded other intangible assets carried at $5.8 million at September 30, 2012, after third quarter 2012 amortization of $0.3 million. These other intangible assets included core deposit intangibles of $4.5 million for Beach and $0.7 million for Gateway and trade name intangibles of $1.0 million.


Steven Sugarman, Chief Executive Officer, commented: "We are pleased to have closed the acquisitions of Beach Business Bank and Gateway Business Bank. This quarter demonstrates First PacTrust's increased core earnings power as it passes $1.6 billion in assets. We seek to further enhance core earnings by closing on the acquisition of The Private Bank of California, targeted to occur in the second quarter of 2013, and by completing the integration of our current two banking subsidiaries into a single, fully integrated commercial bank."

The Company's total assets increased by $555 million from $1.1 billion at June 30, 2012 to finish the third quarter of 2012 at $1.7 billion. The Company's net interest margin for the third quarter of 2012 was 4.02% and its cost of interest-bearing deposits was 0.53%. Non-interest income for the quarter climbed to $19.5 million including the bargain purchase gain. Growth in non-interest income was enhanced by the acquisition of Mission Hills Mortgage Bankers on August 18, 2012, as a part of the Gateway acquisition. Mission Hills Mortgage originated approximately $110 million in single-family residential loans per month during the third quarter.

After consolidation of the net deferred tax assets of Beach Business Bank and Gateway Business Bank, the Company has recorded a net deferred tax asset of $7.4 million, net of a valuation allowance of $7.0 million as of September 30, 2012. The Company will continue to evaluate this valuation allowance each quarter.

During the third quarter of 2012, the Company announced the planned acquisition of The Private Bank of California, a $600 million (assets) bank headquartered in Century City, CA. During the third quarter of 2012, the Company also reported a quarterly dividend of $0.12 per common share, paid on October 1, 2012.

The Company plans to discuss its third quarter earnings, among other items, at its Investor Day on November 9, 2012, from 9:00 a.m. to 1:00 p.m., Pacific Time. All interested parties are welcome to attend the event at the Riviera Country Club in Los Angeles, CA or via live audio at www.firstpactrust.com or conference call at 866-503-8728, event code 68806439.

Excerpts from the Investor Day Presentation relating to third quarter earnings are available on the www.firstpactrust.com website.

About First PacTrust Bancorp

Based in Irvine, CA, First PacTrust Bancorp, Inc. is the $1.6-billion multi-bank holding company of Pacific Trust Bank and Beach Business Bank, which together operate 19 banking offices in Los Angeles, Orange, San Diego and Riverside counties, and 23 loan production offices in California, Arizona, Oregon and Washington. PacTrust Bank gives customers convenient account access choices through 30,000 surcharge-free ATM locations nationwide, as well as mobile, online and telephone banking. PacTrust Bank and Beach Business Bank provide a full range of deposit and loan services tailored to meet the needs of small-to-mid-sized businesses, professionals and individuals.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by First PacTrust with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and the Company undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

First PacTrust Bancorp, Inc.

Consolidated Statements of Financial Condition

(In thousands of dollars except share and per share data)

(Unaudited)

September 30,

December 31,

2012

2011

ASSETS

Cash and due from banks

$

8,867

$

6,755

Interest-bearing deposits

104,638

37,720

Federal funds sold

8,555

Total cash and cash equivalents

122,060

44,475

Time deposits in financial institutions

5,621

Securities available for sale

122,271

101,616

Federal Home Loan Bank and Other Bank stock, at cost

8,842

6,972

Loans receivable, net of allowance of $12,379 at September 30, 2012 and $12,780 at December 31, 2011

1,202,995

775,609

Loans held for sale

110,291

Servicing rights, net

2,170

Accrued interest receivable

5,312

3,569

Other real estate owned (OREO), net

8,704

14,692

Premises and equipment, net

15,492

10,585

Bank owned life insurance investment

18,649

18,451

Prepaid FDIC assessment

1,622

2,405

Deferred income tax

7,441

7,643

Goodwill

7,039

Other intangible assets, net

5,841

Other assets

25,382

13,024

Total assets

$

1,669,732

$

999,041

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

Noninterest-bearing demand

$

88,616

$

20,039

Interest-bearing demand

183,516

68,578

Money market accounts

253,557

188,658

Savings accounts

162,979

39,176

Certificates of deposit

639,553

469,883

Total deposits

1,328,221

786,334

Advances from Federal Home Loan Bank

86,000

20,000

Notes payable, net

34,018

Reserve for loss reimbursements on sold loans

2,665

Accrued expenses and other liabilities

27,089

8,212

Total liabilities

1,477,993

814,546

Commitments and contingent liabilities

SHAREHOLDERS' EQUITY

Preferred stock, $.01 par value per share, $1,000 per share liquidation preference for a total of $32,000; 50,000,000 shares authorized, 32,000 shares issued and outstanding at September 30, 2012 and December 31, 2011

31,925

31,934

Common stock, $.01 par value per share, 196,863,844 shares authorized; 0 shares issued and 0 shares outstanding at September 30, 2012; 11,756,636 shares issued and 10,581,704 shares outstanding at December 31, 2011

119

117

Class B non-voting non-convertible Common stock, $.01 par value per share, 3,136,156 shares authorized; 0 shares issued and outstanding at September 30, 2012 and 1,054,991 shares issued and outstanding at December 31, 2011

11

11

Additional paid-in capital

153,467

150,786

Retained earnings

31,477

27,623

Treasury stock, at cost (September 30, 2012-0 shares, December 31, 2011-1,174,932 shares)

(25,638

)

(25,037

)

Accumulated other comprehensive income/(loss), net

378

(939

)

Total shareholders' equity

191,739

184,495

Total liabilities and shareholders' equity

$

1,669,732

$

999,041

First PacTrust Bancorp, Inc.

Consolidated Statements of Income and Comprehensive Income/(Loss)

(In thousands of dollars except share and per share data)

(Unaudited)

Three months ended

Nine months ended

September 30,

September 30,

2012

2011

2012

2011

Interest and dividend income

Loans, including fees

$

15,928

$

7,757

$

35,060

$

22,936

Securities

708

1,017

2,139

3,263

Dividends and other interest-earning assets

86

49

226

155

Federal funds sold

Total interest and dividend income

16,722

8,823

37,425

26,354

Interest expense

Savings

211

95

233

283

NOW

102

18

162

50

Money market

166

62

557

189

Certificates of deposit

1,099

1,072

3,333

3,225

Federal Home Loan Bank advances

74

92

266

960

Capital leases

2

4

Notes payable

660

1,155

Total interest expense

2,314

1,339

5,710

4,707

Net interest income

14,408

7,484

31,715

21,647

Provision for loan and lease losses

1,031

823

2,001

1,274

Net interest income after provision for loan and lease losses

13,377

6,661

29,714

20,373

Noninterest income

Customer service fees

543

396

1,282

1,107

Mortgage loan prepayment penalties

46

54

62

80

Loan servicing income

146

146

Income from bank owned life insurance

69

77

198

221

Net gain/(loss) on sales of securities available for sale

(12

)

1,450

(83

)

2,887

Net gains on mortgage banking activities

5,546

5,546

Net gain on sales of loans

59

204

Bargain purchase gain

12,055

12,055

Other

1,060

35

1,244

119

Total noninterest income

19,512

2,012

20,654

4,414

Noninterest expense

Salaries and employee benefits

13,613

3,251

23,657

9,488

Occupancy and equipment

2,473

730

4,793

1,926

Advertising

395

71

848

182

Professional fees

3,788

667

5,318

1,416

Stationery paper, supplies, and postage

286

105

582

336

Data processing

1,037

356

1,946

972

ATM costs

93

81

277