Record Earnings Lift PNB Financial’s Stock
With its mortgage banking operations pumping out $100 million a month in home loans, the parent company of Pacific National Bank reported record net income of $1.2 million for the third quarter.
PNB Financial Group, which operates the Newport Beach community bank, said an increase in small business lending and a decrease in bad loans also helped it post high quarterly earnings, which amount to 51 cents a share.
In last year’s third quarter, the company earned $803,000, or 35 cents a share.
The record earnings complete a rebound from the recession of the early 1990s when the bank lost $4 million over three years and operated under regulatory restrictions.
“The bank became much healthier and more profitable than anyone anticipated,” said Allen C. Barbieri, president of PNB and the bank. “None of us foresaw how quickly the economy and the bank would turn around.”
Barbieri put together an investor group in 1994 to buy out the 63% stake held by Terry Giles, a former Orange County lawyer who had been the company’s chairman.
Barbieri, a mortgage banking veteran, decided to use the community bank mainly as a vehicle to fund home loans, sell them to Wall Street and reinvest the proceeds in more mortgages.
Commercial banks, especially small community institutions, typically do not operate major mortgage banking divisions. Such an operation can make even a small institution such as Pacific National rank with major thrifts and mortgage companies in the amount of loans funded.
Loan fees and other income, meanwhile, boosted the bank’s revenue at a faster clip than traditional bank loans that are funded only by deposits and held in a bank’s portfolio.
PNB earned a record $3.3 million, or $1.41 a share, for the first nine months this year, a 27% increase over $2.6 million, or $1.11 a share, for last year’s first nine months.
At the end of September, the company held $229.5 million in loans and other assets, a 24% increase over $185.5 million in assets a year earlier.
The company’s thinly traded stock has risen dramatically since Barbieri started buying it in early 1994 at $3 a share. The stock rose $1 a share Monday to close at $19.50, a 52-week high, in over-the-counter trading.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Stock Surge
PNB Financial Group’s stock advanced Monday after the firm reported record third-quarter net income. PNB Financial is the parent company of Pacific National Bank. Monthly closing stock prices and Monday’s close:
Monday’s close: $19.50
Source: Bloomberg News
