PACIFIC STATE BANCORP 
By STOCKTON, Calif.,
-- Net income for the year ended December 31, 2007 decreased 18% to
$4,549,000 and decreased by 66% to $513,000 for the fourth quarter of
2007.
-- Total Assets as of December 31, 2007 increased 11% to $431,074,000.
In addition to the increased provision for loan losses, PSBC has seen an
erosion of its net interest margin.
PSBC financial performance information for the three month period ending
Income Statement:
-- Total Interest Income: $7,667,000, an increase of $235,000 or 3.2%.
-- Total Interest Expense: $3,492,000, an increase of $625,000 or 21.8%.
-- Net Interest Income: $4,175,000, a decrease of $390,000 or 8.5%.
-- Non-Interest Income: $484,000, a decrease of $290,000 or 37.5%.
-- Non-Interest Expense: $2,585,000, a decrease of $134,000 or 4.9%.
-- Net Income: $513,000, a decrease of $1,004,000 or 66.2%.
-- Efficiency Ratio: 55.5% deteriorating from 50.9%.
-- Basic Earnings Per Share: $0.14 a decrease of $0.29 per share or 67.4%.
-- Diluted Earnings Per Share: $0.13, a decrease of $0.26 per share or
66.7%.
PSBC
Balance Sheet:
-- Total Federal Funds and Investment Securities: $76,232,000, an increase
of $21,495,000 or 39.3%.
-- Net Loans: $308,458,000, an increase of $21,140,000 or 7.4%.
-- Total Assets: $431,074,000, an increase of $44,322,000 or 11.5%.
-- Non-Interest Bearing Deposits: $67,071,000, a decrease of $6,126,000 or
8.4%.
-- Total Deposits: $341,821,000, an increase of $825,000 or 0.2%.
-- Total Borrowings: $40,000,000 an increase of $35,100,000 or 716.3%.
The increase in other borrowings was primarily the result of the Bank
utilizing relatively low cost borrowings to fund asset growth.
-- Total Shareholders Equity: $34,036,000, an increase of $4,976,000 or
17.1%. In addition to the retention of earnings, the increase in
shareholders equity includes the proceeds of stock option exercises by
directors and employees.
Income Statement:
-- Total Interest Income: $31,242,000 an increase of $4,747,000 or 17.9%.
-- Total Interest Expense: $13,842,000, an increase of $4,654,000 or
50.7%.
-- Net Interest Income: $17,400,000, an increase of $93,000 or 0.5%.
-- Non-Interest Income: $2,465,000, a decrease of $118,000 or 4.6%. The
decrease in noninterest income was primarily the result of decreased
loan sales in 2007.
-- Non-Interest Expense: $10,997,000, an increase of $637,000 or 6.2%.
The increase in non-interest expense was due in part to the cost of
facilities and operations associated with the growth of the Bank. 2007
was the first full year of expenses associated with the opening of the
Bank's eighth branch office in Lodi, California in 2006. In addition,
the company opened its ninth branch office in Hayward California during
the first quarter of 2007.
-- Net Income: $4,549,000, a decrease of $994,000 or 17.9%.
-- Net Interest Margin: 4.79%, down 97 basis points.
-- Annualized Return on Average Assets: 1.13% down from 1.67%.
-- Annualized Return on Average Equity: 14.22% down from 22.91%.
-- Efficiency Ratio: 55.36% deteriorating from 52.09%.
-- Basic Earnings Per Share: $1.23, a decrease of $0.34 per share or
21.7%.
-- Diluted Earnings Per Share: $1.14, a decrease of $0.27 per share or
19.2%.
Attached are certain unaudited financial statements supporting the
financial information summarized above. Further inquiries should be directed
to
SAFE HARBOR: Except for historical information contained herein, the statements contained in this press release are 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 and quarterly reports on Form 10-Q. Pacific State Bancorp disclaims any intent or obligation to update these forward-looking statements.
PACIFIC STATE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share amounts) December December
31, 31,
2007 2006
Assets
Cash and due from banks $13,794 $18,985
Federal funds sold 34,880 31,630
Investment securities - available for sale
(amortized cost of $41,996 in 2007 and
$23,186 in 2006) 41,352 23,107
Loans, less allowance for loan losses of
$3,948 in 2007 and $2,478 in 2006 308,458 287,318
Bank premises and equipment, net 14,269 11,957
Company owned life insurance 8,025 6,079
Accrued interest receivable and other assets 10,296 7,676
Total assets $431,074 $386,752
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $67,071 $73,197
Interest bearing 274,750 267,799
Total deposits 341,821 340,996
Other borrowings 40,000 4,900
Subordinated debentures 8,764 8,764
Accrued interest payable and other liabilities 6,452 3,033
Total liabilities 397,037 357,693
Shareholders' equity:
Preferred stock - no par value; 2,000,000
shares authorized; none outstanding
Common stock - no par value; 24,000,000
shares authorized;
shares issued and outstanding 3,703,207
in 2007 and 3,661,477 in 2006 10,419 9,652
Retained earnings 24,004 19,455
Accumulated other comprehensive loss, net of tax (386) (47)
Total shareholders' equity 34,037 29,059
Total liabilities and shareholders' equity $431,074 $386,752
PACIFIC STATE BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Year ended
December 31, December 31,
(in thousands, except
share amounts) 2007 2006 2007 2006
Interest income:
Interest and fees on loans $6,754 $6,815 $27,902 $24,901
Interest on federal funds sold 220 235 1,285 273
Interest on investment
securities 693 382 2,055 1,321
Total interest income 7,667 7,432 31,242 26,495
Interest expense:
Interest on deposits 3,221 2,618 12,844 8,102
Trust preferred securities 186 179 702 710
Interest on borrowings 85 70 296 376
Total interest expense 3,492 2,867 13,842 9,188
Net interest income 4,175 4,565 17,400 17,307
Provision for loan losses 1,165 90 1,425 360
Net interest income after
provision for loan losses 3,010 4,475 15,975 16,947
Non-interest income:
Service charges 243 211 889 864
Other fee income 238 497 1,426 1,425
Gain from sale of loans 3 66 150 294
Total non-interest income 484 774 2,465 2,583
Non-interest expenses:
Salaries and employee benefits 1,084 1,435 5,336 5,479
Occupancy 325 315 1,180 980
Furniture and equipment 184 136 708 672
Other 992 833 3,773 3,229
Total other expenses 2,585 2,719 10,997 10,360
Income before provision
for income taxes 909 2,530 7,443 9,170
Provision for income tax expense 396 1,013 2,894 3,627
Net income $513 $1,517 $4,549 $5,543
Basic earnings per share $0.14 $0.43 $1.23 $1.57
Diluted earnings per share $0.13 $0.39 $1.14 $1.41
Weighted average common
shares outstanding 3,701,751 3,540,344 3,687,197 3,537,314
Weighted average common
and common equivalent
shares outstanding 3,949,471 3,922,745 4,003,876 3,923,497
PACIFIC STATE BANCORP
Yield Analysis
For Year Ended December 31,
(Dollars in thousands) 2007 2006
Interest Interest
Income Average Income Average
Average or Yield or Average or Yield or
Assets: Balance Expense Cost Balance Expense Cost
Interest-
earning
assets:
Loans $300,239 $27,902 9.29% $269,395 $24,901 9.24%
Investment
securities 37,089 2,033 5.48% 25,418 1,321 5.20%
Federal funds
sold 25,115 1,285 5.12% 5,602 273 4.87%
Interest Bearing
Deposits in
Banks 1,077 22 2.04% - - 0.00%
Total average
earning assets 363,520 $31,242 8.59% 300,415 $26,495 8.82%
Non-earning
assets:
Cash and due
from banks 15,398 13,655
Bank premises
and equipment 12,940 10,609
Other assets 13,323 9,058
Allowance for
loan loss (2,665) (2,536)
Total average
assets $402,516 $331,201
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits
Interest-
bearing
Demand $81,898 $2,231 2.72% $92,280 $2,438 2.64%
Savings 5,352 46 0.86% 6,359 56 0.88%
Time Deposits 200,154 10,567 5.28% 125,994 5,608 4.45%
Other
borrowing 14,359 998 6.95% 16,379 1,086 6.63%
Total average
interest-
bearing
liabilities 301,763 13,842 4.59% 241,012 9,188 3.81%
Noninterest-
bearing
liabilities:
Demand
deposits 64,242 64,593
Other
liabilities 4,525 1,405
Total average
liabilities 370,530 307,010
Shareholders'
equity: 31,986 24,191
Total average
liabilities and
shareholders'
equity $402,516 $331,201
Net interest
income $17,400 $17,307
Net interest
margin 4.79% 5.76%
SOURCE Pacific State Bancorp
