PBAM earnings increased from a year earlier in the third quarter of 2026, but declined from the preceding quarter as expenses and credit-loss provisions rose. Private Bancorp of America, the parent of CalPrivate Bank, announced on October 16 that net income for the quarter ended September 30 was $11.4 million, or $1.97 per diluted share, compared with $13.1 million, or $2.27 per share, in the second quarter and $9.7 million, or $1.65 per share, a year earlier.
Key Takeaways
- Net interest income grew despite a sequential decline in net interest margin.
- Nasdaq listing costs, property impairment and higher credit provisions weighed on quarterly profit.
- Loans and core deposits expanded, while criticized loans increased to $71.9 million.
Table of Contents
- PBAM earnings reflect higher operating and credit costs
- Interest income grows despite a narrower margin
- Credit deterioration centers on several real estate loans
- Loan and deposit growth continues
- Conclusion
PBAM earnings reflect higher operating and credit costs
The company’s October 16 earnings filing confirms that the results cover the three and nine months ended September 30, 2026, and are unaudited.
Third-quarter noninterest expense reached $18.4 million, up from $16.9 million in the preceding quarter. The increase primarily reflected $0.6 million of impairment expense on other real estate owned, a $0.4 million increase in compensation and employee benefits, and higher costs associated with moving the stock’s listing to Nasdaq.
The quarter included approximately $0.9 million of Nasdaq uplisting expenses. PBAM began trading on the Nasdaq Global Select Market on July 30, 2026; listing-related expenses totaled approximately $1.4 million for the year to date.
Credit-loss provisioning also moved against the sequential earnings comparison. The company recorded a $1.3 million provision expense, versus a $0.2 million reversal in the second quarter. Approximately $0.8 million of the third-quarter provision related to a new expected-credit-loss model implemented on July 1, primarily affecting reserves for unfunded commitments.
| Item | Details |
|---|---|
| Total assets | $2.75 billion at September 30, 2026. |
| Available-for-sale securities | $267.7 million; up $30.6 million from June 30. |
| Available liquidity | $2.4 billion, including $1.9 billion of unused borrowing capacity. |
| Tier 1 leverage ratio | Preliminary 11.47%, compared with 11.52% at June 30. |
| Total risk-based capital ratio | Preliminary 15.20%, compared with 14.86% at June 30. |
Interest income grows despite a narrower margin
Net interest income rose to $34.1 million, increasing 1.7% from the second quarter and 16.3% from a year earlier. Higher interest income from deposits at other financial institutions and investment securities helped offset increased interest expense.
Net interest margin narrowed to 5.05% from 5.18% in the preceding quarter, although it remained above the year-earlier 4.65%. The company said the sequential decline primarily reflected a 15-basis-point benefit from net nonaccrual interest adjustments in the second quarter, partly offset by third-quarter prepayment penalties and a special Federal Home Loan Bank stock dividend.
Total deposit costs edged up to 1.66% from 1.63% sequentially, but remained below 2.02% a year earlier. The results therefore show different trends across the two comparisons: funding costs were slightly higher quarter over quarter but materially lower year over year.
Credit deterioration centers on several real estate loans
Criticized loans increased to $71.9 million, or 3.29% of total loans, from $58.0 million, or 2.72%, at June 30. The increase primarily involved a Chapter 11 bankruptcy filing affecting two related real estate investor loans totaling $8.8 million and delinquent payments on two SBA 504 real estate loans totaling $3.7 million.
Nonaccrual loans rose to $28.8 million from $26.9 million. Total nonperforming assets reached $43.3 million, or 1.58% of assets, compared with $40.5 million, or 1.50%, at the previous quarter-end.
The allowance for loan losses increased to $31.7 million, representing 1.45% of loans held for investment, versus 1.43% in June. Chief Executive Rick Sowers said the company was devoting resources to improving credit metrics and believed reserves were more than adequate. That assessment is management’s view, rather than assurance against future losses.
Loan and deposit growth continues
Loans held for investment reached $2.19 billion, up $54.0 million, or 2.5%, from June 30. Core deposits increased $31.8 million, or 1.4%, to $2.36 billion, while total deposits stood at $2.41 billion. Brokered deposits were unchanged.
CalPrivate Bank’s preliminary capital ratios remained above the thresholds for well-capitalized institutions. Separately, PBAM had made no purchases under its authorized $10 million share repurchase program as of September 30.
Conclusion
PBAM’s annual earnings improvement came alongside continued lending and deposit growth, but higher expenses and weaker credit metrics reduced sequential profit. The next quarterly comparison will show whether that balance-sheet growth is accompanied by improvement in the credit measures management is working to address.
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