FISB 1st Capital Bancorp (QX)

1st Capital Bank (OTCBB:FISB) today announced that it ended the year with $1,006,000 in net income and total assets of $226,834,000. Net income for the year ended December 31, 2010 increased $1,712,000 or 242% over a net loss of ($706,000) for the previous year. Diluted earnings per share for 2010 increased 245% to a positive $0.32 from a loss of ($0.22) in 2009. Net income for the year ended December 31, 2010, excluding the allowance for loan losses and provision for income taxes, was $1,796,000, an increase of $1,972,000 or 1120% over ($176,000) for the prior year. Total assets as of December 31, 2010 increased $34,536,000 (18%) from December 31, 2009 and $94,304,000 from December 31, 2008. As of December 31, 2010, 1st Capital Bank was well capitalized, with a Total Risk Based Capital ratio of 17.3%, which was over twice the regulatory required minimum.

1st Capital Bank is proud to report the following statistical data regarding its results of operations for the year ended December 31, 2010. This data was provided to the Bank by the investment banking firm of Howe Barnes Hoefer & Arnett, derived from data provided by SNL Financial, and is believed by the Bank to be reliable: 

• Of the 226 banks headquartered in California, 1st Capital Bank is one of only six banks with no non-performing assets at December 31, 2010, which were also profitable for the year ending December 31, 2010.
• Of those 226 California based banks, 1st Capital Bank is one of only 10 banks which had a highly desirable concentration of more than 35% of its loan portfolio in Commercial and Industrial loans and more than 35% of its deposit base consisting of non-interest bearing accounts.
• Out of these 10 institutions, 1st Capital Bank is the only one with no non-performing assets at December 31, 2010.

On a national level, 1st Capital Bank is one of only five banks out of 6,565 commercial banks in the United States to meet the same high standards of profitability, loan and deposit concentrations and no non-performing assets at December 31, 2010.

 "1st Capital Bank has now been profitable for a year and a half and it has done so while growing in a safe and secure manner," said President and Chief Executive Officer Fred Rowden. "Serving the needs of local businesses and community members, 1st Capital Bank is growing its reputation for quality service and performance. There is a buzz in the air, and customers and shareholders are beginning to get excited…with good reason," added Mr. Rowden.

Also during the year ended December 31, 2010, 1st Capital Bank was one of a limited number of banks in California to receive the Bauer Financial, Inc. five-star "superior" rating. Per Bauer Financial, "Five-stars is our highest rating and indicates that this institution is one of the strongest in the United States."

Financial Summary:

Total assets were $226,834,000 as of December 31, 2010. Growth in loans was the greatest contributor to the overall asset growth. Loans, net of the allowance for loan losses of $2,723,000, totaled $174,264,000 at December 31, 2010, an increase of $41,533,000 (31%) from December 31, 2009. The growth in loans was primarily funded by an increase in deposits of $33,045,000 (20%) to $197,277,000 at December 31, 2010. "Balance sheet liquidity and deposit growth will facilitate future loan growth as 1st Capital Bank continues to lend to businesses and individuals without the use of 'bailout money,'" said Mr. Rowden.

Net interest income after the provision for loan losses for the year ended December 31, 2010 was $7,285,000, an increase of $2,318,000 (47%) over the year ended December 31, 2009. Interest income for the year ended December 31, 2010 was $9,178,000, an increase of $1,964,000 (27%) over the year ended December 31, 2009. Average earning assets for the year ended December 31, 2010 were $193,243,000, an increase of $40,282,000 (26%) compared to $152,961,000 for the year ended December 31, 2009.   While the yield on the loan portfolio increased slightly, the majority of the increase in interest income was due to growth in the loan portfolio.

Interest expense for the year ended December 31, 2010 was $1,251,000, a decrease of $467,000 (27%) from the year ended December 31, 2009. Average interest bearing liabilities for the year ended December 31, 2010 were $123,676,000, an increase of $24,919,000 (25%) compared to $98,757,000 for the year ended December 31, 2009.   While average balances of interest-bearing deposit liabilities increased, interest expense decreased in 2010 from 2009 due to the repricing of the interest-bearing deposits throughout the year, reflecting the lower interest rate environment. The higher volume of interest-bearing liabilities increased interest expense $395,000 while the lower rates decreased the expense an offsetting $862,000.

These changes in the composition and pricing of 1st Capital Bank's earning assets and deposit liabilities resulted in a net interest margin for the year ended December 31, 2010 of 4.1% compared to 3.6% for the year ended December 31, 2009. 

1st Capital Bank recorded a provision for loan losses of $642,000 during the year ended December 31, 2010 compared to $529,000 in the year ended December 31, 2009. The ratio of the allowance for loan losses to total loans outstanding was 1.54% at December 31, 2010 and 2009. At December 31, 2010 and 2009, there were no non-performing, restructured or impaired loans and the Bank did not have any real estate acquired through foreclosure.

Noninterest income increased $10,000 (9%) to $116,000 for the year ended December 31, 2010 compared to the year ended December 31, 2009, largely due to service charges from the growth in the Bank's deposit portfolio.

Noninterest expenses increased by $469,000 (8%) to $6,247,000 for the year ended December 31, 2010 compared to the year ended December 31, 2009.   The majority of this increase was due to the overall growth of the Bank including the addition of several new employees during the year. 

1st Capital Bank currently operates three branch offices in Monterey County, which are located in the historic Estrada Adobe at 470 Tyler Street, Monterey; 1097 South Main Street, Salinas; and downtown King City at 432 Broadway Street. The experienced bankers at 1st Capital Bank provide traditional deposit, lending, mortgage and commercial products and services to business and retail customers throughout the California Central Coast and Salinas Valley areas of Monterey County.

Information regarding the Bank may be obtained from the Banks website at www.1stCapitalBank.com. Copies of the Bank's press releases are available on the website.

Forward Looking Statements

In addition to the historical information contained herein, this press release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. The reader of this press release should understand that all such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause such a difference include, among other matters, changes in interest rates; economic conditions including inflation and real estate values in California and the Bank's market areas; governmental regulation and legislation; credit quality; competition affecting the Bank's businesses generally; the risk of natural disasters and future catastrophic events including terrorist related incidents and other factors beyond the Bank's control; and factors discussed in the Bank's periodic reports under the Securities Exchange Act of 1934, as amended, on Forms 10-K, 10-Q and 8-K filed with the FDIC. The Bank does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.

1ST CAPITAL BANK
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
	3 Months Ended		12 Months Ended
	December 31,		December 31,
Statement of Income Data	2010	2009	2010	2009
Interest income
Loans (including fees)	$  2,460	$  1,882	$  8,582	$  6,515
Investment securities	112	110	458	524
Other	17	21	138	175
Total interest income	2,589	2,013	9,178	7,214
Interest expense
Interest on deposits	251	369	1,251	1,718
Net interest income	2,338	1,644	7,927	5,496
Provision for loan losses	176	73	642	529
Net interest income after
provision for loan losses	2,162	1,571	7,285	4,967
Noninterest income
Service charges on deposits	22	16	66	53
Other	9	11	50	53
Total noninterest income	31	27	116	106
Noninterest expenses
Salaries and benefits	834	766	3,290	3,019
Occupancy	139	159	574	532
Furniture and equipment	90	75	312	280
Other	542	548	2,071	1,947
Total noninterest expenses	1,605	1,548	6,247	5,778
Income before provision for income taxes	588	50	1,154	(705)
Provision for income taxes	146	0	148	1
Net income	$ 442	$ 50	$ 1,006	$ (706)
Common Share Data
Earnings per share
Basic	$ 0.14	$ 0.02	$ 0.32	$ (0.22)
Diluted	$ 0.14	$ 0.02	$ 0.32	$ (0.22)
Weighted average shares outstanding	3,157,699	3,157,699	3,157,699	3,157,699
Weighted average shares outstanding --
diluted	3,157,767	3,157,699	3,157,716	3,157,699
Book value per share			$   9.02	$   8.64
Tangible book value			$   9.02	$    8.64
Shares outstanding			3,157,699	3,157,699

1ST CAPITAL BANK
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
	December	December
Balance Sheet Data	2010	2009
Assets
Cash and due from banks	$ 6,672	$ 3,138
Federal funds sold and overnight deposits	25,530	35,750
Available-for-sale securities, at fair value, and interest bearing deposits	17,591	17,842
Loans:
Commercial	74,311	62,466
Real estate-construction	2,678	--
Real estate-other	97,581	69,885
Consumer	1,991	1,979
Deferred loan costs, net	426	482
Total loans	176,987	134,812
Allowance for loan losses	(2,723)	(2,081)
Net loans	174,264	132,731
Premises and equipment, net	745	851
Accrued interest receivable and other assets	2,032	1,986
Total assets	$ 226,834	$ 192,298
Liabilities and Shareholders' Equity
Deposits:
Demand, noninterest bearing	$ 71,654	$ 55,271
Demand, interest bearing	46,410	42,236
Savings	26,807	23,243
Time	52,406	43,482
Total deposits	197,277	164,232
Accrued interest payable and other liabilities	1,083	791
Total liabilities	198,360	165,023
Shareholders' equity	28,474	27,275
Total liabilities and shareholders' equity	$ 226,834	$ 192,298
Asset Quality
Loans past due 90 days or more and accruing interest	$ --	$ --
Nonaccrual loans	--	--
Restructured loans	--	--
Other real estate owned	--	--
Total non-performing assets	$ --	$ --
Allowance for loan losses to total loans	1.54%	1.54%
Allowance for loan losses to NPL's	n/a	n/a
Allowance for loan losses to NPA's	n/a	n/a
Regulatory Capital and Ratios
Tier 1 capital	$ 28,210	$ 27,059
Total risk based capital	$ 30,411	$ 28,751
Tier 1 capital ratio	16.1%	20.1%
Total risk based capital ratio	17.3%	21.3%
Tier 1 leverage ratio	13.9%	15.4%

1ST CAPITAL BANK
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
	3 Months Ended		12 Months Ended
	December 31,		December 31,
Selected Financial Ratios	2010	2009	2010	2009
Return on average total assets	0.86%	0.12%	0.50%	(0.45%)
Return on average shareholders' equity	6.16%	0.73%	3.61%	(2.59%)
Net interest margin	4.71%	3.91%	4.10%	3.59%
Efficiency ratio	67.75%	92.62%	77.67%	103.14%
Selected Average Balances
Loans	$ 172,818	$ 136,458	$ 153,235	$ 121,997
Taxable investments	15,367	10,511	13,446	11,375
Federal funds sold and CD's	8,751	19,682	26,562	19,589
Total earning assets	$  196,936	$ 166,652	$ 193,243	$ 152,961
Total assets	$ 203,358	$ 169,447	$ 199,507	$ 157,373
Demand deposits - interest bearing	$  46,647	$ 38,114	$ 51,693	$ 35,677
Savings	28,079	23,670	27,050	22,186
Time deposits	48,294	42,419	44,933	40,894
Total interest bearing liabilities	$ 123,020	$ 104,202	$ 123,676	$ 98,757
Demand deposits - noninterest bearing	$ 50,442	$ 36,878	$ 46,740	$ 30,850
Shareholders' equity	$ 28,469	$ 27,314	$ 27,887	$ 27,228

CONTACT: Jayme Fields, CFO
         (831) 264-4011