1st Capital Bank Announces First Quarter 2014 Financial Results
Record Loans, Assets, Deposits, and Shareholders' Equity
MONTEREY, CA--(Marketwired - Apr 30, 2014) - 1st Capital Bank
(OTCQB: FISB) (the "Bank") today announced first quarter financial
results through March 31, 2014. The Bank achieved record
levels of loans, assets, deposits, and shareholders' equity at
March 31, 2014.
Net income during the first quarter of 2014 was $408 thousand,
equivalent to $0.11 per diluted common share. This compares to
net income of $263 thousand, equivalent to $0.08 per diluted common
share, during the first quarter of 2013. Net income for the
fourth quarter of 2013 (the immediately preceding quarter) was $612
thousand, equivalent to $0.18 per diluted common share. The
increase in earnings from the first quarter of 2013 primarily
resulted from a lower provision for loan losses. The Bank
charged off a $500 thousand impaired commercial loan during the
first quarter of 2013, which increased loan loss provision expense
by $277 thousand during that three month period. The Bank has
since received a partial recovery of that charge-off in the amount
of $32 thousand. The decline in earnings from the fourth
quarter of 2014 was primarily due to: (i) $120 thousand in higher
loan loss provision expense, which in turn principally stemmed from
growth in the size of the loan portfolio; (ii) the impact of two
fewer calendar days in the quarter; and (iii) $41 thousand in
recruiting expense during the most recent quarter associated with
the hire of the Bank's new Chief Financial Officer.
Total assets expanded by 9.7% to $424.5 million during the first
quarter of 2014, representing one of the fastest rates of growth
for any quarter in the Bank's recent history. This record
level of assets was achieved just prior to the Bank's seventh
anniversary of opening for business.
Commenting on the first quarter of 2014 financial performance,
Mark Andino, the Bank's President and Chief Executive Officer,
stated: "We are pleased to report continued growth and a record
balance sheet. The Bank concluded the first quarter of 2014
with a favorable credit profile and a strong pipeline of potential
new business. We also finished the first quarter of 2014 with
a high level of on-balance sheet liquidity, some of which was
associated with seasonal deposit inflows from certain clients and
some of which represented a short term accumulation of transaction
account balances by customers in preparation for April tax
payments." Mr. Andino then continued: "The Bank's total assets
increased by 22.9% during the twelve months ended March 31,
2014. We capitalized this expansion through a combination of
retained earnings, equity based compensation (primarily restricted
share awards), and the exercise of vested stock options. Stock
option exercises continued during April 2014; and over the past
year have been a meaningful source of new capital for the
Bank."
Kurt Gollnick, the Bank's Chairman of the Board, stated: "The
Bank's first quarter 2014 return on average equity of 4.33%
reflected both the costs inherent in a relatively rapid pace of
growth, including provision expense to build the allowance for loan
losses, and the ongoing spread compression arising from the
continuation of the historically low interest rate environment
combined with aggressive pricing competition for high quality
loans. The Board of Directors recognizes that the Bank needs
to generate a higher return on average equity in order to maximize
long term shareholder value."
Daniel R. Hightower, M.D., the Bank's Vice Chairman of the
Board, added: "We have been pleased with the Bank's increasing
market share while building an enviable balance sheet chiefly
composed of low cost transaction deposits and high quality
loans. The rate of growth has required investments in the
Bank's infrastructure, including both human and technology
resources. The cost of those investments has restrained the
current level of return on average assets."
Performance
Highlights
- The Bank presented a high quality credit profile at March
31, 2014, with a nonperforming asset ratio of 0.19% and
a ratio of allowance for loan losses to nonperforming loans of
590.95%. In addition, the largest credit relationship in
the Bank rated Substandard at December 31, 2013 paid off in
full during the first quarter of 2014; and the Bank recorded
net recoveries during the first quarter of 2014.
- Non-accrual loans totaled $0.8 million at March 31, 2014,
equivalent to 0.30% of loans outstanding. No new loans
were transferred to non-accrual status during the first
quarter of 2014, and the inventory of non-accrual loans at
December 31, 2013 continued to pay down.
- Total deposits increased by 10.5% during the first quarter
of 2014. Over 93% of the Bank's deposit portfolio at
March 31, 2014 was composed of transaction accounts.
- At March 31, 2014, the Bank maintained a regulatory total
risk-based capital ratio of 15.24%, substantially in excess of
the 10.00% threshold to be categorized in the highest
regulatory capital classification of "well
capitalized." The Bank's regulatory capital ratios at
March 31, 2014 benefited from an increase of $57 thousand in
Tier 1 Regulatory Capital from payments received for
the exercise of vested stock options during the first quarter
of 2014. An additional $98 thousand in Tier 1 Regulatory
Capital from the exercise of vested stock options was obtained
during early April 2014.
- Tangible book value per share rose to a record $10.96 as
of March 31, 2014, as compared to $10.79 per share at
December 31, 2013.
Financial Condition
Analysis
Funds held at the Federal Reserve Bank of San Francisco
("FRB-SF") rose from $15.5 million at December 31, 2013 to $28.2
million at March 31, 2014. The Bank decided to retain excess
on-balance sheet liquidity at the FRB-SF at the conclusion of the
first quarter of 2014 rather than invest those funds into
securities in light of: (i) the size of the loan pipeline; (ii) the
planned purchase of a pool of closed end residential hybrid
adjustable rate mortgages during the second quarter of 2014; (iii)
recognition of seasonal deposit patterns for certain clients; and
(iv) forecasted deposit outflows in April in conjunction with tax
payments by clients.
Time deposits at other financial institutions declined from $4.6
million at December 31, 2013 to $4.3 million at March 31, 2014, as
funds from maturing time deposits were reinvested into
securities.
Securities categorized as available for sale increased from
$104.0 million at December 31, 2013 to $107.3 million at March 31,
2014. Security purchases during the first quarter of 2014 were
entirely composed of floating rate tranches of collateralized
mortgage obligations ("CMO") issued by the Federal National
Mortgage Association ("FNMA") or the Federal Home Loan Mortgage
Corporation ("FHLMC"). The Bank purchased variable rate
securities during the first quarter of 2014 in order to allocate
most of its balance sheet duration to meeting client demand for
primarily intermediate term fixed rate loans in the current
interest rate environment. The following table presents the
Bank's security portfolio profile at March 31, 2014:
|
|
|
|
|
March 31, |
$
In Thousands |
|
2014 |
|
|
Fair Value |
Type of Security |
|
(Unaudited) |
SBA(1) fixed rate loan pools |
|
$ |
2,754 |
Municipal fixed rate securities |
|
|
2,213 |
Agency(2) variable rate residential MBS(3) |
|
|
3,042 |
Agency fixed rate residential MBS |
|
|
5,693 |
Agency variable rate commercial MBS |
|
|
23,253 |
Agency variable rate residential CMO |
|
|
64,593 |
Agency variable rate commercial CMO |
|
|
5,704 |
|
|
|
|
Total |
|
$ |
107,252 |
|
|
|
|
(1) U.S. Small Business Administration
(2) FNMA, FHLMC, or the Government National Mortgage Association
or GNMA
(3) Mortgage backed security
The municipal securities were all rated at least AA by a
nationally recognized ratings agency. The fair value of the
Bank's $107.3 million in securities at March 31, 2014 exceeded its
amortized cost basis by $64 thousand.
At March 31, 2014, the Bank maintained a strong liquidity
profile, consisting of a significant volume of on-balance sheet
assets (including cash & cash equivalents and securities
available for sale) and significant off-balance sheet borrowing
capacity. The increase in the Bank's liquidity profile during
the first quarter of 2014 is reflected in the ratio of net loans to
deposits, which decreased from 72.0% at December 31, 2013 to 70.6%
at March 31, 2014.
Commenting on the Bank's liquidity, Jon Ditlevsen, the Bank's
Chief Lending Officer, stated: "The Bank commenced the second
quarter of 2014 with both ample funds for lending and a strong loan
pipeline. The new relationship managers we have added to the
team over the past year are now fully integrated with the Bank and
its markets, leading to the sourcing of a greater volume of loan
applications from local businesses and professionals. We
recognize that increasing the Bank's ratio of net loans to deposits
via quality lending is a key objective for the Bank; as we aim to
build a greater stream of net interest income."
Warren Wayland, Chairman of the Director Loan Committee, added:
"We have been pleased with the volume of loan applications from
markets adjacent to Monterey County, particularly San Luis Obispo
County, as the Bank continues to enhance its presence along the
Central Coast."
Net loans increased from $250.8 million at December 31, 2013 to
a record $271.8 million at March 31, 2014. The Bank originated
or purchased over $35 million in new credit commitments during the
first quarter of 2014, which were partially offset by payoffs and
curtailments, principal reductions on lines of credit, and
scheduled principal amortization.
The Bank's loan mix shifted during the first quarter of
2014. Residential 1 to 4 unit loans increased by $15.8
million; primarily due to the purchase of a $19.2 million
residential loan pool. The loans in the pool were seasoned 5/1
or 7/1 mortgages that reprice based upon a margin over the 1 year
LIBOR index. These mortgages met the Bank's standard
underwriting criteria and are secured by first deeds of trust on
homes located in several California counties. Multifamily
loans increased by $2.7 million during the first quarter of 2014,
as the Bank has sought to originate more of this type of loan given
the favorable trends in rents, vacancies, and real estate values in
many of the market areas along the Central Coast. Commercial
and industrial loans outstanding declined by $5.2 million during
the first quarter of 2014 primarily due to the payoff in full of
$5.4 million in commercial and industrial loans graded Substandard
at December 31, 2013. This collection by the Bank notably
improved its aggregate credit profile.
The Bank's allowance for loan losses increased from $4.7
million, or 1.84% of total loans, at December 31, 2013 to $4.8
million, or 1.75% of total loans, at March 31, 2014. The
allowance was increased during the first quarter of 2014 by: (i)
$120 thousand in loan loss provision; and (ii) $23 thousand in
recoveries. The Bank did not record any charge-offs during the
first quarter of 2014.
Non-accrual loans decreased by $16 thousand from December 31,
2013 to March 31, 2014 due to principal payments received. All of
the Bank's non-accrual loans were current or less than 30 days
delinquent in scheduled payments as of March 31, 2014.
Loans graded Substandard decreased from $8.7 million at December
31, 2013 to $4.9 million at March 31, 2014. The effect of the
aforementioned collection in full of the largest credit
relationship graded Substandard at December 31, 2013 was partially
offset by a $1.7 million credit relationship being downgraded to
Substandard during the first quarter of 2014. Loans graded
Special Mention increased from $5.9 million at December 31, 2013 to
$6.9 million at March 31, 2014, primarily due to the downgrade of
one credit relationship. Both of the aforementioned credit
relationships downgraded during the first quarter of 2014 were
current in their scheduled payments at March 31, 2014 and the
borrowers and guarantors have continued to be cooperative with the
Bank.
The ratio of the Bank's allowance for loan losses to
non-performing loans rose from 562.47% at December 31, 2013 to
590.95% at March 31, 2014. The Bank has never owned any
foreclosed real estate.
Premises and equipment, net of accumulated depreciation,
decreased slightly from $1.48 million at December 31, 2013 to $1.45
million at March 31, 2014, as periodic depreciation more than
offset new asset purchases. During the second quarter of 2014,
the Bank plans to complete the implementation of a significant
upgrade to its technology infrastructure to provide much greater
bandwidth and support faster processing speeds, while also
enhancing redundancy in order to better position the Bank to
respond to a range of potential natural disasters or other events
presenting challenges to the continued provision of financial
services to the Bank's clients.
The Bank's investment in the capital stock of the Federal Home
Loan Bank ("FHLB") was constant at $1.5 million at both December
31, 2013 and March 31, 2014. During April 2014, the Bank
purchased an additional $0.5 million in FHLB capital stock in
conjunction with the standard asset-based investment requirement
applicable to FHLB members.
Commenting on the Bank's asset profile at March 31, 2014, Mike
Winiarski, the Bank's Chief Financial Officer, stated: "We continue
to seek to increase loans as a percentage of total assets as a
means to augment net interest income. We also plan to bring
comparatively low yielding balances held at the Federal Reserve
Bank down to 4.00% to 5.00% of total assets."
Total deposits increased 10.5% from $348.4 million at December
31, 2013 to a record $385.1 million at March 31, 2014. The
weighted average interest rate on the Bank's deposits at March 31,
2014 was 0.17%, up from 0.15% at December 31, 2013 primarily due to
the shift in deposit mix during the first quarter of 2014. The
Bank was successful in attracting deposit accounts from local
businesses and professionals during the first quarter of 2014 in
part due to its comprehensive suite of cash management services
combined with a dedicated Cash Management Department. The Bank
plans to introduce further enhancements to its cash management
services and online and mobile banking platforms later this
year.
Non-interest bearing demand deposits decreased from $144.2
million at December 31, 2013 to $140.1 million at March 31,
2014. This reduction primarily stemmed from normal
fluctuations in client account balances. Interest bearing
checking accounts increased from $20.3 million at December 31, 2013
to $25.2 million at March 31, 2014. Given the historically low
interest rate environment, the Bank has attracted these consumer,
sole proprietor, and non-profit organization checking accounts by
its focus on a concierge level of service rather than based upon
interest rate.
Money market deposits increased from $81.3 million at December
31, 2013 to $107.6 million at March 31, 2014. Savings deposits
rose from $75.7 million at December 31, 2013 to $85.7 million at
March 31, 2014. A portion of these increases was associated
with seasonal deposit patterns by certain clients. Both money
market and savings deposits have been an attractive alternative for
liquid funds in the current historically low interest rate
environment.
Time deposits decreased slightly from $27.0 million at December
31, 2013 to $26.5 million at March 31, 2014. Factors
contributing to this decline included transfers from certain
maturing time deposits into transaction accounts and the Bank's
moderating its time deposit pricing in response to its favorable
liquidity position and the availability of alternative low cost
funding. $6.0 million of the $26.5 million in time deposits at
March 31, 2014 were comprised of low cost state term
funds. None of the Bank's deposits at March 31, 2014 or
December 31, 2013 were brokered deposits or sourced from deposit
listing services.
Commenting on the Bank's deposit performance, Irene Shippee, the
Bank's Operations Administrator, stated: "The Bank enjoyed an
outstanding deposit performance during the first quarter of
2014. We opened in excess of 200 new deposit accounts, with
all three full service branch offices performing well." Ms.
Shippee then continued: "We also enjoyed good success in
establishing deposit services for new credit customers, with those
borrowers often taking advantage of the customized online banking
features offered by the Bank."
Shareholders' equity rose from $37.7 million at December 31,
2013 to a record $38.4 million at March 31, 2014. This
increase resulted from: (i) 2014 year to date net income of $408
thousand; (ii) $108 thousand in equity compensation expense
(primarily associated with restricted shares); (iii) $57 thousand
from the exercise of vested stock options; and (iv) a $79 thousand
increase in the accumulated other comprehensive income associated
with changes in unrealized gains and losses on securities
classified as available for sale. During the first quarter of
2014, the Bank's Board of Directors continued to be compensated
solely via restricted shares (i.e., no cash compensation). The
Bank also continued to gradually shift its compensation mix for
officers toward a greater percentage of restricted shares versus
cash. The more extensive use of restricted share awards as a
form of compensation highlights the directors' and officers'
commitment to enhancing shareholder value.
Operating Results
Analysis
Net interest income before provision for loan losses increased
from $3.0 million during the three months ended March 31, 2013 to
$3.1 million during the three months ended March 31.
2014. However, net interest income before provision for loan
losses during the most recent quarter decreased from $3.2 million
during the three months ended December 31, 2013 (the immediately
preceding quarter) primarily due to a combination of two fewer
calendar days and a lower yield on the loan portfolio. The
Bank's yield on gross loans declined from 4.85% during the fourth
quarter of 2013 to 4.55% during the first quarter of
2014. This reduction stemmed from: (i) older, higher rate
loans continuing to amortize and be paid off; (ii) aggressive price
competition in the Bank's market area from both large banks and
smaller financial institutions for high quality loans; and (iii)
the purchase of the aforementioned seasoned residential mortgage
pool during the first quarter of 2014, with the yield on that pool
being below the average for the existing loan portfolio.
The year over year increase in first quarter net interest income
was primarily generated by a rise in interest earning assets, as
the Bank's net interest margin declined from 3.73% during the first
quarter of 2013 to 3.11% during the first quarter of
2014. While the Bank was successful in decreasing the weighted
average interest rate on deposits from 0.22% during the first
quarter of 2013 to 0.17% during the first quarter of 2014, this
savings was insufficient to offset the impact of the aforementioned
reduction in loan portfolio yield and a decline in the ratio of
average gross loans to average deposits from 79.7% during the first
quarter of 2013 to 72.0% during the first quarter of 2014.
The Bank plans to support its net interest income in upcoming
quarters via the following strategies:
- continuing to focus upon the size and mix of the Bank's
balance sheet, particularly with the goal of originating
a greater volume of loans (while maintaining credit standards)
in order to support growth in the loan portfolio;
- seeking to acquire additional residential loan pools that
meet the Bank's credit criteria as a means of
further diversifying the loan portfolio and as an alternative
to purchasing additional investment securities; and
- pursuing opportunities for incremental reductions in the
Bank's funding costs through marginal pricing changes and a
shift in deposit mix toward non-interest bearing demand
deposit accounts.
The provision for loan losses was $120 thousand during the first
quarter of 2014, compared to $460 thousand during the first quarter
of 2013 and none during the fourth quarter of 2013 (the immediately
preceding quarter). Factors contributing to the provision for
loan losses during the first quarter of 2014 included:
- the $21.1 million increase in the size of the gross loan
portfolio;
- the aforementioned $1.0 million increase in the balance of
loans rated Special Mention; and
- a $2.5 million increase in the balance of loans rated Watch, of
which $1.7 million is associated with one credit relationship.
The effects of the above factors upon the level of provision for
loan losses was partially offset by the previously discussed shift
in loan portfolio mix during the first quarter of 2014; in
particular the swing in outstanding balances from commercial and
industrial loans to closed end residential mortgage loans, which
are allocated a lower formula reserve ratio due to their credit and
collateral profile. The $5.4 million in loans graded
Substandard at December 31, 2013 that were paid off in full during
the first quarter of 2014 were classified as impaired loans without
specific reserves at December 31, 2013.
The $460 thousand in provision for loan losses recorded during
the first quarter of 2013 reflected:
- additional loan loss reserves of $277 thousand associated with
an impaired $500 thousand commercial loan that was charged off
during the first quarter of 2013; and
- an increase in hospitality industry related loans (a primary
industry in the Bank's market area), which are reserved at a higher
ratio than most other types of investor real estate.
Non-interest income increased from $64 thousand during the first
quarter of 2013 and $67 thousand during the fourth quarter of 2013
(the immediately preceding quarter) to $73 thousand during the
first quarter of 2014. Factors contributing to this increase
included:
- The Bank implemented a revised fee and service charge schedule
effective May 1, 2013 that included some new fees as well as
increases to certain existing fees for various services the Bank
provides.
- The Bank has become more selective in its fee waivers.
- Various types of non-interest income have increased in
conjunction with the rise in the size of the deposit portfolio and
the acquisition of certain business clients who are comparatively
larger users of cash management, wire transfer, and other fee based
services.
- The management team has increased the Bank's focus on
generating non-interest income through a variety of sources,
including merchant bankcard services and check printing.
Non-interest expense increased from $2.2 million during the
first quarter of 2013 and $2.2 million during the fourth quarter of
2013 (the immediately preceding quarter) to $2.3 million during the
first quarter of 2014.
Salaries and benefits expense rose from $1.3 million during the
first quarter of 2013 to $1.4 million during the first quarter of
2014 due to: (i) three more full-time equivalent employees; (ii)
periodic base salary increases for employees other than executive
officers; (iii) the Bank's recruiting more experienced and higher
cost bankers to fill certain open positions over the past year; and
(iv) the Bank's shift to a safe harbor 401(k) Plan effective
January 1, 2014 that resulted in an increased level of employer
matching contributions.
Salaries and benefits expense rose from $1.3 million during the
fourth quarter of 2013 (the immediately preceding quarter) to $1.4
million during the first quarter of 2014 primarily due to: (i)
seasonal increases in payroll taxes and the accrued vacation
liability; and (ii) an increase in equity compensation expense
associated with restricted share awards, as the Bank continues to
gradually increase the percentage of employees with equity
compensation as a means of fostering an "ownership orientation"
that aligns employee interests with the generation of long term
shareholder value.
The Bank did not recognize any incentive compensation expense
during the first quarter of 2014 or the fourth quarter of 2013 due
to the Bank's performance on key metrics including return on
average equity and return on average assets. This compares to
a $52 thousand accrual for incentive compensation during the first
quarter of 2013.
Occupancy expenses decreased from $193 thousand during the first
quarter of 2013 to $182 thousand during the first quarter of
2014. Occupancy expenses during the fourth quarter of 2013
(the immediately preceding quarter) were $198
thousand. Certain tenant improvements became fully depreciated
during 2013, resulting in a lower level of prospective depreciation
expense.
Professional services expenses increased from $112 thousand
during the first quarter of 2013 to $139 thousand during the first
quarter of 2014. The first quarter of 2014 included $41
thousand in professional recruiter fees associated with the
sourcing of the Bank's new Chief Financial Officer, compared to $20
thousand during the fourth quarter of 2013 and none during the
first quarter of 2013. Partially offsetting these recruiter
fees were expense savings on various professional services during
the first quarter of 2014 compared to the first quarter of 2013
resulting from the Bank's decision to deregister its common shares
under the Securities Exchange Act of 1934, as amended, during the
second quarter of 2013.
Data and item processing expenses increased from $105 thousand
during the first quarter of 2013 to $127 thousand during the first
quarter of 2014 due to a wider use of technology by the Bank and
because of the associated costs for processing a greater number of
client accounts and transactions. The Bank completed the
replacement of its remaining Windows XP based workstations during
the first quarter of 2014, prior to the expiration of support for
that operating system by Microsoft.
Furniture and equipment expense increased from $58 thousand
during the first quarter of 2013 to $72 thousand during the first
quarter of 2014. Furniture and equipment expense during the
fourth quarter of 2013 (the immediately preceding quarter) was $77
thousand. The primary reason for the rise in equipment expense
from the first quarter of 2013 to the first quarter of 2014 was
increased depreciation on new technology purchases.
Other non-interest expense was little changed from $374 thousand
during the first quarter of 2013 to $375 thousand during the first
quarter of 2014. Other non-interest expense totaled $377
thousand during the fourth quarter of 2013 (the immediately
preceding quarter).
The Bank's efficiency ratio (operating costs compared to income
from operations), deteriorated from 70.30% during the first quarter
of 2013 to 74.60% during the first quarter of 2014 entirely due to
the margin compression experienced by the Bank. The ratio of
the Bank's non-interest expense to average total assets declined
from 2.58% during the first quarter of 2013 to 2.31% during the
first quarter of 2014. The Bank has therefore achieved
progress in operating more efficiently and leveraging its expense
base, with that progress more than offset by the constrained net
interest margin.
The Bank increased its total assets by 22.9% during the twelve
months ended March 31, 2014 without adding additional physical
locations and while increasing full-time equivalent employees by
just 5.2%. The Bank's use of technology has enabled the
processing of an increasing volume of client transactions without
adding significant overhead expense. The Bank offers both
qualified businesses and consumers check deposit processing via
scanner, with check deposit via smartphone planned for introduction
in coming months.
The Bank's effective book tax rate decreased from 41.8% during
the first quarter of 2013 to 39.5% during the first quarter of
2014. Factors contributing to this decrease included the
Bank's commencing the purchase of tax qualified municipal bonds
during the second quarter of 2013 and the Bank's reducing the
amount of non-deductible social club dues over the past year.
About 1st Capital Bank
The Bank's primary target markets are commercial enterprises,
professionals, real estate investors, family business entities, and
residents along the Central Coast Region of California. The
Bank provides a wide range of credit products, including loans
under various government programs such as those provided through
the U.S. Small Business Administration ("SBA") and the U.S.
Department of Agriculture ("USDA"). A full suite of deposits
accounts is also furnished, complemented by robust cash management
services. The Bank operates full service branch offices in
Monterey, Salinas, and King City. The Bank's corporate offices
are located at 5 Harris Court, Building N, Suite 3, Monterey,
California 93940. The Bank's website is www.1stCapitalBank.com
and the main telephone number is 831.264.4000.
Member FDIC / Equal Opportunity Lender / SBA Preferred
Lender
Forward-Looking Statements:
Certain of the statements contained herein that are not
historical facts are "forward-looking statements" within the
meaning of and subject to the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements may contain words or phrases including, but not limited,
to: "believe," "expect," "anticipate," "intend," "estimate,"
"target," "plans," "may increase," "may fluctuate," "may result
in," "are projected," and variations of those words and similar
expressions. 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 other factors. The Bank does not undertake, and
specifically disclaims any obligation, to update or revise any
forward-looking statements, whether to reflect new information,
future events, or otherwise, except as required by law.
This news release is available at the www.1stCapitalBank.com
Internet site for no charge.
--- financial data
follows ---
|
|
|
|
1ST CAPITAL BANK |
|
CONDENSED FINANCIAL DATA |
|
(Unaudited) |
|
(Dollars in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
Financial
Condition Data1 |
|
2014 |
|
|
2013 |
|
|
2013 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
2,729 |
|
|
$ |
1,734 |
|
|
$ |
1,943 |
|
|
Funds held at the Federal Reserve Bank2 |
|
|
28,230 |
|
|
|
15,548 |
|
|
|
22,135 |
|
|
Time deposits at other financial institutions |
|
|
4,333 |
|
|
|
4,582 |
|
|
|
9,321 |
|
|
Available-for-sale securities, at fair value |
|
|
107,252 |
|
|
|
103,961 |
|
|
|
62,903 |
|
|
Loans receivable held for investment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction / land (including farmland) |
|
|
16,084 |
|
|
|
15,555 |
|
|
|
19,014 |
|
|
|
Residential 1 to 4 units |
|
|
60,135 |
|
|
|
44,322 |
|
|
|
24,454 |
|
|
|
Home equity lines of credit |
|
|
11,696 |
|
|
|
9,092 |
|
|
|
10,548 |
|
|
|
Multifamily |
|
|
8,633 |
|
|
|
5,963 |
|
|
|
5,615 |
|
|
|
Owner occupied commercial real estate |
|
|
50,370 |
|
|
|
49,747 |
|
|
|
48,646 |
|
|
|
Investor commercial real estate |
|
|
70,460 |
|
|
|
67,019 |
|
|
|
62,945 |
|
|
|
Commercial and industrial |
|
|
51,321 |
|
|
|
56,564 |
|
|
|
67,024 |
|
|
|
Other loans |
|
|
7,942 |
|
|
|
7,268 |
|
|
|
5,785 |
|
|
|
|
Total loans |
|
|
276,641 |
|
|
|
255,530 |
|
|
|
244,031 |
|
|
|
Allowance for loan losses |
|
|
(4,834 |
) |
|
|
(4,691 |
) |
|
|
(4,274 |
) |
|
Net loans |
|
|
271,807 |
|
|
|
250,839 |
|
|
|
239,757 |
|
|
Premises and equipment, net |
|
|
1,450 |
|
|
|
1,484 |
|
|
|
1,402 |
|
|
Bank owned life insurance |
|
|
3,670 |
|
|
|
3,648 |
|
|
|
3,579 |
|
|
Investment in FHLB3 stock, at cost |
|
|
1,494 |
|
|
|
1,494 |
|
|
|
1,026 |
|
|
Accrued interest receivable and other assets |
|
|
3,509 |
|
|
|
3,774 |
|
|
|
3,238 |
|
Total assets |
|
$ |
424,474 |
|
|
$ |
387,064 |
|
|
$ |
345,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing demand deposits |
|
$ |
140,131 |
|
|
$ |
144,173 |
|
|
$ |
120,780 |
|
|
|
Interest bearing checking accounts |
|
|
25,177 |
|
|
|
20,268 |
|
|
|
15,533 |
|
|
|
Money market |
|
|
107,584 |
|
|
|
81,266 |
|
|
|
73,671 |
|
|
|
Savings |
|
|
85,687 |
|
|
|
75,685 |
|
|
|
70,478 |
|
|
|
Time |
|
|
26,489 |
|
|
|
26,983 |
|
|
|
29,391 |
|
|
|
|
Total deposits |
|
|
385,068 |
|
|
|
348,375 |
|
|
|
309,853 |
|
|
Accrued interest payable and other liabilities |
|
|
1,012 |
|
|
|
947 |
|
|
|
1,147 |
|
|
Shareholders' equity |
|
|
38,394 |
|
|
|
37,742 |
|
|
|
34,304 |
|
Total liabilities and shareholders' equity |
|
$ |
424,474 |
|
|
$ |
387,064 |
|
|
$ |
345,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding4 |
|
|
3,503,310 |
|
|
|
3,497,190 |
|
|
|
3,310,503 |
|
Nominal and tangible book value per share |
|
$ |
10.96 |
|
|
$ |
10.79 |
|
|
$ |
10.36 |
|
Ratio of net loans to total deposits |
|
|
70.59 |
% |
|
|
72.00 |
% |
|
|
77.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 = Certain reclassifications have been made to prior period
financial statements to conform them to the current period
presentation. Loans held for investment are presented
according to definitions applicable to the regulatory Call
Report.
2 = Includes cash letters in the process of collection settled
through the Federal Reserve Bank.
3 = Federal Home Loan Bank
4 = The Bank revised its 2007 Equity Incentive Plan during the
second quarter of 2013. Those revisions resulted in a lower
number of outstanding common shares being reported at June 30, 2013
(and prospectively) due to the elimination of voting and other
rights for unvested restricted share awards.
|
|
|
1ST CAPITAL BANK |
CONDENSED FINANCIAL DATA |
(Unaudited) |
(Dollars in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
3 Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
Operating
Results Data1 |
|
2014 |
|
2013 |
|
2013 |
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
2,951 |
|
$ |
3,078 |
|
$ |
2,992 |
|
Investment securities |
|
|
201 |
|
|
188 |
|
|
132 |
|
Federal Home Loan Bank stock |
|
|
28 |
|
|
25 |
|
|
6 |
|
Other |
|
|
22 |
|
|
20 |
|
|
36 |
|
|
Total
interest and dividend income |
|
|
3,202 |
|
|
3,311 |
|
|
3,166 |
Interest expense |
|
|
|
|
|
|
|
|
|
|
Interest bearing checking accounts |
|
|
7 |
|
|
6 |
|
|
7 |
|
Money market deposits |
|
|
66 |
|
|
53 |
|
|
64 |
|
Savings deposits |
|
|
60 |
|
|
58 |
|
|
60 |
|
Time deposits |
|
|
16 |
|
|
17 |
|
|
28 |
|
|
Total
interest expense |
|
|
149 |
|
|
134 |
|
|
159 |
Net interest income |
|
|
3,053 |
|
|
3,177 |
|
|
3,007 |
Provision for loan losses |
|
|
120 |
|
|
-- |
|
|
460 |
Net interest income after provision for loan
losses |
|
|
2,933 |
|
|
3,177 |
|
|
2,547 |
|
|
|
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
Service charges on deposits |
|
|
30 |
|
|
30 |
|
|
22 |
|
BOLI dividend income |
|
|
21 |
|
|
22 |
|
|
24 |
|
Other |
|
|
22 |
|
|
15 |
|
|
18 |
|
|
Total
noninterest income |
|
|
73 |
|
|
67 |
|
|
64 |
|
|
|
|
|
|
|
|
|
|
Noninterest expenses |
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
1,437 |
|
|
1,329 |
|
|
1,317 |
|
Occupancy |
|
|
182 |
|
|
198 |
|
|
193 |
|
Professional services |
|
|
139 |
|
|
106 |
|
|
112 |
|
Data and item processing |
|
|
127 |
|
|
124 |
|
|
105 |
|
Furniture and equipment |
|
|
72 |
|
|
77 |
|
|
58 |
|
Other |
|
|
375 |
|
|
377 |
|
|
374 |
|
|
Total
noninterest expenses |
|
|
2,332 |
|
|
2,211 |
|
|
2,159 |
Income before provision for income taxes |
|
|
674 |
|
|
1,033 |
|
|
452 |
Provision for income taxes |
|
|
266 |
|
|
421 |
|
|
189 |
Net income |
|
$ |
408 |
|
$ |
612 |
|
$ |
263 |
|
|
|
|
|
|
|
|
|
|
Common Share
Data |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.12 |
|
$ |
0.18 |
|
$ |
0.08 |
|
|
Diluted |
|
$ |
0.11 |
|
$ |
0.18 |
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
3,503,106 |
|
|
3,411,109 |
|
|
3,251,003 |
|
|
Diluted |
|
|
3,549,319 |
|
|
3,474,389 |
|
|
3,332,108 |
|
|
|
|
|
|
|
|
|
|
1 = Certain reclassifications have been made to prior period
financial statements to conform them to the current period
presentation.
|
|
|
|
|
|
1ST CAPITAL BANK |
|
CONDENSED FINANCIAL DATA |
|
(Unaudited) |
|
(Dollars in thousands) |
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
Asset
Quality |
|
2014 |
|
|
2013 |
|
|
2013 |
|
|
Loans past due 90 days or more and accruing interest |
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
Nonaccrual restructured loans |
|
|
229 |
|
|
|
230 |
|
|
|
235 |
|
|
Other nonaccrual loans |
|
|
589 |
|
|
|
604 |
|
|
|
678 |
|
|
Other real estate owned |
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
|
$ |
818 |
|
|
$ |
834 |
|
|
$ |
913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to total loans |
|
|
1.75 |
% |
|
|
1.84 |
% |
|
|
1.75 |
% |
|
Allowance for loan losses to nonperforming loans |
|
|
590.95 |
% |
|
|
562.47 |
% |
|
|
468.13 |
% |
|
Nonaccrual loans to total loans |
|
|
0.30 |
% |
|
|
0.33 |
% |
|
|
0.37 |
% |
|
Nonperforming assets to total assets |
|
|
0.19 |
% |
|
|
0.22 |
% |
|
|
0.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory
Capital and Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 regulatory capital |
|
$ |
38,251 |
|
|
$ |
37,783 |
|
|
$ |
33,949 |
|
|
Total regulatory capital |
|
$ |
41,688 |
|
|
$ |
41,087 |
|
|
$ |
37,036 |
|
|
Tier 1 leverage ratio |
|
|
9.46 |
% |
|
|
10.04 |
% |
|
|
10.16 |
% |
|
Tier 1 risk based capital ratio |
|
|
13.99 |
% |
|
|
14.38 |
% |
|
|
13.82 |
% |
|
Total risk based capital ratio |
|
|
15.24 |
% |
|
|
15.63 |
% |
|
|
15.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended |
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
Selected
Financial Ratios1 |
2014 |
|
|
2013 |
|
|
2013 |
|
|
Return on average total assets |
0.41 |
% |
|
0.65 |
% |
|
0.32 |
% |
|
Return on average shareholders' equity |
4.33 |
% |
|
6.57 |
% |
|
3.10 |
% |
|
Net
interest margin |
3.11 |
% |
|
3.40 |
% |
|
3.73 |
% |
|
Net
interest income to average total assets |
3.06 |
% |
|
3.35 |
% |
|
3.64 |
% |
|
Efficiency ratio |
74.60 |
% |
|
68.16 |
% |
|
70.30 |
% |
|
|
|
|
|
|
|
|
|
1 = All Selected Financial Ratios are annualized other than the
Efficiency Ratio.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
Selected
Average Balances1 |
|
2014 |
|
2013 |
|
2013 |
|
Gross loans |
|
$ |
262,893 |
|
$ |
251,916 |
|
$ |
238,456 |
|
Investment securities |
|
|
103,886 |
|
|
90,490 |
|
|
51,172 |
|
Federal Home Loan Bank stock |
|
|
1,494 |
|
|
1,494 |
|
|
1,028 |
|
Other interest earning assets |
|
|
29,244 |
|
|
26,283 |
|
|
36,699 |
|
|
Total interest earning assets |
|
$ |
397,517 |
|
$ |
370,183 |
|
$ |
327,355 |
|
Total assets |
|
$ |
404,223 |
|
$ |
376,265 |
|
$ |
334,594 |
|
|
|
|
|
|
|
|
|
|
|
Interest bearing checking accounts |
|
$ |
21,611 |
|
$ |
18,924 |
|
$ |
15,594 |
|
Money market |
|
|
97,630 |
|
|
81,571 |
|
|
68,202 |
|
Savings |
|
|
79,675 |
|
|
74,422 |
|
|
66,658 |
|
Time deposits |
|
|
26,849 |
|
|
27,151 |
|
|
29,969 |
|
|
Total interest bearing deposits |
|
$ |
225,765 |
|
$ |
202,068 |
|
$ |
180,423 |
|
Noninterest bearing demand deposits |
|
|
139,398 |
|
|
134,626 |
|
|
118,835 |
|
|
Total deposits |
|
$ |
365,163 |
|
$ |
336,694 |
|
$ |
299,258 |
|
Borrowings |
|
|
-- |
|
|
1,517 |
|
|
-- |
|
Shareholders' equity |
|
$ |
38,173 |
|
$ |
36,950 |
|
$ |
34,354 |
|
|
|
|
|
|
|
|
|
|
1 = Certain reclassifications have been made to prior period
financial statements to conform them to the current period
presentation.
For further
information, please contact: Mark R. Andino President
and Chief Executive Officer 831.264.4028 office 831.915.6498 smart
phone Mark.Andino@1stCapitalBank.com or Michael J. Winiarski Chief
Financial Officer 831.264.4014 office 831.747.0007 smart phone
Michael.Winiarski@1stCapitalBank.com
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