Americas United Bank Announces Results For The Fourth Quarter And Fiscal Year 2013

Americas United Bank (OTCQB: AUNB) reported unaudited results and a net profit of $3,223,000, or $1.12 per basic share for the fourth quarter and $3,934,000, or $1.37 per basic share for the year-ended December 31, 2013. Profit for the quarter ended December 31, 2013 and fiscal year 2013 was significantly impacted by the Bank’s elimination of the valuation allowance on its Deferred Tax Asset. Pretax income for the quarter was $171,000 compared to $376,000 in the fourth quarter of 2012. Net profit for the year ended December 31, 2013 was $3,934,000, or $1.37 per basic share, compared to $1,847,000, or $0.64 per basic share for the 2012 fiscal year.

In 2006, the Bank established a valuation allowance against its deferred tax asset due to its operating losses and uncertainty about its ability to utilize its tax loss carry forwards. The deferred tax asset continued to increase in subsequent years from 2007 to 2011, due to additional losses. In 2012, following a series of successive quarterly profits, and based on its expectation for future earnings the Bank reversed $409,000 of its then $4,657,000 million valuation allowance. This quarter, the Bank achieved its eleventh consecutive quarterly profit and has exceeded its earnings projections for 2013. Based on this information, the Bank has determined that it “more likely than not” will be able to fully utilize its tax loss carry forward and determined that it was appropriate to reverse a significant portion of the remaining $4,234,000 million deferred tax asset valuation allowance by recording a credit to tax expense during the quarter of $2,997,000.

Core earnings for the Company continued to improve this quarter. The net interest margin increased from 3.36% in the third quarter of 2013 to 3.59% in the fourth quarter of 2013. Average earning assets increased $805,000 compared to the third quarter of this year, the increase in the net interest margin caused net interest income to increase $73,000, or 7.4% on a third quarter to fourth quarter comparison. Compared to the same quarter a year ago, the average earning assets increased $6.7 million, the net interest margin increased from 3.27% to 3.59% and the net interest income increased $149,000, or 16.5%.

There was no recorded provision for loan losses in the fourth quarter of 2013 due to the favorable credit quality condition of the loan portfolio. The improvement in loan quality over the past year allowed the Bank to reduce the Allowance for Loan and Lease Losses (“ALLL”) $300,000, lowering the ALLL from 2.61% of loans at the end of the fourth quarter of 2012 to 2.03% as of December 31, 2013.

Non interest income increased $40,000, or 69.3% in the fourth quarter of 2013 as compared to the fourth quarter of 2012. For the year, non interest income increased $158,000 or 56.1% in 2013 over that of fiscal 2012. Most sources of non interest income increased slightly, with the notable increase in the gain on the sale of SBA loans, which increased $171,000, or 100%.

Total non interest expenses increased $144,000, or 17.3% in the fourth quarter of 2013 compared to the fourth quarter of 2012, largely due to various cost associated with the previously announced planned acquisition of the Lancaster Branch of Silvergate Bank and the relocation of the Glendale Branch from the 11 th floor to the ground floor of the building in order to better serve the customers and to lower the overall monthly rent expense.

On December 30, 2013, Americas United Bank and Silvergate Bank, a wholly-owned subsidiary of Silvergate Capital Corporation, jointly announced that they have entered into a purchase and assumption agreement for Americas United Bank to acquire the deposits and branch facility of Silvergate Bank’s full service branch office in Lancaster, California.

Adriana M. Boeka, President and Chief Executive Officer of Americas United Bank, stated, “We are very pleased to announce our entry into the Lancaster market, and we look forward to welcoming the employees and depositors of the Lancaster Regional Office to the Americas United Bank family. At Americas United Bank, our vision is to provide a full-array of business and personal banking services to small-to-medium-sized businesses, professionals and entrepreneurs. We are excited to serve the greater Lancaster area, and we believe it is a natural compliment to our other full-service regional branches in Glendale and Downey, California.”

The Company also recorded a gain on the sale of its only Other Real Estate Owned as it sold a foreclosed property during the late fourth quarter of 2013. The sale resulted in a gain of $55,000 in the quarter as compared to no activity of this nature in 2012.

Total assets of the Bank increased $4.9 million compared to December 31, 2012. Investments in interest bearing bank balances increased $4.6 million as the bank used excess overnight liquidity to deploy into earning assets providing an improved return on the excess funds. Total loans increased $15.1 million due to the improved lending environment and the concerted effort of the bank to grow the loan portfolio. Federal funds or overnight balances decreased $17.9 million as a result of the increased deployment into earning assets such as loans and interest bearing bank balances. Total deposits increased $4.8 million year over year but took a slight dip from the 2013 third quarter balance of $95.8 million to close the year at $91.4 million. The quarter-to-quarter fluctuation was due to normal business activity of the customer base.

The Bank also hired Robert Hunt, as Senior Vice President – Operations and Orlando Gonzalez, as Senior Vice President – Sales in the fourth quarter of 2013.

Ms. Boeka commented, “We are pleased to have added two experienced business bankers to our senior management team. We look forward to the two new team members’ success at Americas United Bank.”

Jeff Pollard, Executive Vice President and Chief Financial Officer, commented, "We are pleased to report another quarterly profit and improvement in our operating results. As the general economic conditions continue to improve, we expect to see an increase in demand for our products. New loan bookings did improve in the fourth quarter, however there was some unanticipated loan payoff activity due to customers seeking to use available cash to payoff their respective loans. Our loan pipeline remains strong compared to a year ago, and should the anticipated loan growth occur it will improve our net interest margin and net interest income. We continue to have a solid deposit base, a liquid balance sheet, be well capitalized, and are well positioned for increased lending activity."

Mr. Manuel J. Remon, Chairman of the Board, commented, "Local and national economic indicators continue to improve, and we remain cautiously optimistic given the recent signs of relative strength in the local and regional recovery. While we remain concerned about the effect of global and national issues on our local economy, we are optimistic that our progress will continue through the rest of 2014 and into 2015. We will continue to focus our efforts on growth, maintaining our asset quality, maintaining liquidity, seeking new sources of revenue and controlling expenses. Our current environment still presents challenges, but we remain confident in our ability to maintain and improve our position as a preferred financial institution to businesses and consumers alike."

Americas United Bank provides a full range of financial services, including credit and deposit products, cash management, and internet banking for businesses and high net worth individuals from its head office at 801 N. Brand Boulevard, Suite 1150, Glendale, CA 91203 and the Downey Office at 8255 Firestone Boulevard, Suite 110, Downey, CA 90241.

Coming soon to Lancaster, California at 539 West Lancaster Boulevard, Lancaster, California 93534.

Information on products and services may be obtained by calling (818) 637-7000 or visiting the Bank’s website at

Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank's business, and the intent, belief or current expectations of the Bank, its directors or its officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the Bank's performance and implementation of its business plans, loan performance, interest rates, and regulatory matters.
4th QUARTER REPORT (Unaudited)
December 31, December 31,
2013 2012
Cash and Cash Equivalents $ 2,962,124 $ 2,933,798
Investments and Interest Bearing Deposit at Banks 15,774,131 11,221,485
Federal Funds/FRB Balances 10,663,350 28,580,000
Gross Loans 87,437,770 72,368,003
Allowance for Loan Losses (1,772,951 ) (1,885,369 )
Property and Equipment, net 185,012 208,576
Other Real Estate Owned - -
Other Assets   4,268,370         1,195,819  
Total Assets $ 119,517,806       $ 114,622,312  
Liabilities and Shareholders’ Equity
Non-Maturing Deposits $ 51,934,853 $ 58,078,024
Certificates of Deposit 39,470,992 28,533,269
Total Deposits 91,405,845 86,611,293
Other Borrowings 4,000,000 8,000,000
Other Liabilities   572,255         514,836  
Total Liabilities 95,978,100 95,126,129
Shareholders’ Equity   23,539,706         19,496,183  
Total Liabilities and Shareholders’ Equity $ 119,517,806       $ 114,622,312  
3 Months Ended Year-to-Date
Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2012
Interest Income $ 1,164,611 $ 1,038,916 $ 4,310,195 $ 4,310,304
Interest Expense   111,847       135,590       452,823     578,901  
Net Interest Income 1,052,764 903,326 3,857,372 3,731,403
Provision for Loan Losses - (250,000 ) (300,000 ) (1,013,221 )
Other Income 96,780 57,156 439,785 281,714
Other Expenses   978,466       834,072       3,714,185     3,587,185  
Earnings before Income Taxes 171,078 376,410 882,972 1,439,153
Income Taxes (2,996,405 ) (408,916 ) (2,995,580 ) (408,016 )
Gain on Sale of OREO   55,416       -       55,416     -  
Net Income $ 3,222,899     $ 785,326     $ 3,933,968   $ 1,847,169  
Common Shares Issued and Outstanding 2,878,150 2,878,150 2,878,150 2,878,150
Basic Earnings Per Share $ 1.12 $ 0.27 $ 1.37 $ 0.64
Return on Average Assets (annualized) 10.72 % 2.79 % 3.40 % 1.73 %
Return on Average Equity (annualized) 15.74 % 16.54 % 19.72 % 10.15 %
Net Interest Margin 3.59 % 3.27 % 3.39 % 3.55 %
Efficiency Ratio 85.12 % 86.84 % 86.43 % 89.39 %
Dec. 31, 2013 Dec. 31, 2012
Tier 1 Leverage Capital Ratio 17.63 % 17.46 %
Tier 1 Risk-Based Capital Ratio 23.12 % 26.05 %
Total Risk-Based Capital Ratio 24.38 % 27.32 %
Allowance for Loan & Lease Losses (ALLL) as a % of Total Loans 2.03 % 2.61 %
Non Performing Assets as a % of Total Assets 0.01 % 0.35 %
Non Performing Assets as a % of Total Loans 0.02 % 0.56 %
Net Charge Offs as a % of Total Loans -0.21 % -0.57 %
Total ALLL as a % of Non Performing Loans 11923.0 % 468.1 %
Texas Ratio (Non Performing Assets as a % of T1 Capital & ALLL) 0.07 % 1.89 %
Basic Book Value Per Share $ 8.18 $ 6.77

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