SOURCE: 1st Capital Bank

1st Capital Bank

April 26, 2012 09:00 ET

1st Capital Bank Reports Continued Growth in Assets, Deposits and Loans for the 1st Quarter of 2012

MONTEREY, CA--(Marketwire - Apr 26, 2012) - 1st Capital Bank (OTCBB: FISB): 1st Capital Bank, Monterey County's award winning community bank, reported continued growth for the first quarter ended March 31, 2012. The Bank reported an increase in total assets of 31% to $291 million as of March 31, 2012, compared to $222 million for the same quarter one year ago. Total loans grew to $202 million at March 31, 2012, a 10% increase over the same quarter a year ago. The Bank remains focused on growing its loan portfolio while maintaining its high quality. The Bank's asset quality remained strong, with a ratio of nonperforming loans to total loans of just 0.16% as of March 31, 2012, unchanged from a year prior.

Total deposits grew to $258 million, which represents an increase of $66 million, or 34% over the similar quarterly period in 2011. 1st Capital Bank continued to grow its valuable mix of "core" deposits, as demand and savings deposits were 84% of total accounts as of March 31, 2012. This growth in deposits will be used to fund future loan growth and other investments as soon opportunities to prudently do so arise. In the interim, the excess liquidity generated by the growth in deposits will continue to compress the Bank's net interest margin until they are lent out at the higher rates earned by loans. However, they will also continue to add to the overall increase in earning assets and profitability.

1st Capital Bank also reported net income before the provision for income taxes of $537,000 for the quarter ended March 31, 2012 compared to $596,000 for the same period last year. After tax net income of $310,000 for the quarter ended March 31, 2012 decreased $286,000, compared to net income of $596,000 for the same quarter in the previous year, as the Bank recorded a provision for income taxes of $227,000 in the current year compared to none in 2011 due to the accounting applied to taxes by the Bank during its then start-up period. Basic and fully diluted earnings per share of $0.10 and $0.09, respectively, for the quarter ended March 31, 2012 compare to $0.19 and $0.18, respectively, for the first quarter a year ago. Net interest income after the provision for loan losses for the quarter ended March 31, 2012 increased $550,000 compared to the same period a year ago. This increase was offset by an increase in noninterest expenses of $620,000 as the Bank significantly increased the strength of its infrastructure by hiring a number of new staff and by expanding its Monterey branch operating location.

"We are extremely pleased with the Bank's continued growth and performance for the first quarter of 2012," stated President and CEO Fred Rowden. "In 2010 the Bank reached a level of assets which provided for sustained profitability, and in 2011 we continued that growth along with a significant increase in earnings. When the opportunity to invest for future and accelerated growth presented itself, we decided to make that investment with the goal of enhancing long-term profitability for the benefit of our shareholders. This unique opportunity included acquiring proven banking talent which will enable 1st Capital Bank to take advantage of the changes that have occurred in our competitive environment. As with any investment, the cost and expense typically arrives before any potential benefit, and the increase in the Bank's expenses in the 1st quarter reflects this. However, we believe that it is always prudent stewardship to be looking forward, managing to opportunities, and investing for the future," concluded Mr. Rowden.

Key Performance Highlights of the First Quarter 2012 Results:

  • Core deposit growth of $66 million, or 35%, over the first quarter of 2011

  • Continued strong quality loan growth of $19 million or 10% over the first quarter of 2011

  • 13% increase in net interest income

  • Strong capital position with a total risk based capital ratio of 17.3%

  • Rated the Highest Performing Bank in Monterey County by the Findley Reports based on 2011 financial performance

  • New and expanded Monterey banking office opened on March 6, 2012

The Bank's Financial Summary for the quarter ended March 31, 2012 is described below. For more information regarding the Bank's growth and performance, please visit our website at www.1stcapitalbank.com, or call 831.264.4000.

Financial Summary

Net income of $310,000 for the quarter ended March 31, 2012 decreased $286,000 compared to net income of $596,000 for the same quarter in the previous year, and increased $53,000 over the net income for the trailing quarter ended December 31, 2011. Excluding income tax expense, which was zero in 2011 due to the tax accounting applied to the Bank in its start-up period, income before taxes of $537,000 for the quarter ended March 31, 2012 compares to $596,000 for that period in the prior year. Basic and fully diluted earnings per share for the three months ended March 31, 2012 were $0.10 and $0.09, respectively, compared to basic and fully diluted earnings per share of $0.19 and $0.18, respectively, for the same quarter in 2011 and $0.08 for both basic and fully diluted earnings per share for the quarter ended December 31, 2011.

Total assets of $291 million as of March 31, 2012 increased $69 million (31%) from March 31, 2011 and increased $3 million (1%) from December 31, 2011. Loans grew $19 million (10%) from March 31, 2011 to a total of $202 million as of March 31, 2012, with $1.4 million (1%) of that growth occurring in the three-month period from December 31, 2011 to March 31, 2012. Loan growth was funded largely by deposits, which grew $66 million (35%) from March 31, 2011 to a total of $258 million as of March 31, 2012, and increased by $2.9 million (1%) from the balances outstanding as of December 31, 2011. It is not unusual for the Bank to experience softness in loan and deposit growth during the first quarter of each year as our customers finalize tax returns and work through a period of seasonally reduced credit demand.

Net interest income after the provision for loan losses for the quarter ended March 31, 2012 was $2.7 million, an increase of $550,000 (26%) over the quarter ended March 31, 2011 and an increase of $130,000 (5%) over the trailing quarter ended December 31, 2011.

Interest income for the quarter ended March 31, 2012 was $2.9 million, an increase of $272,000 (10%) over the quarter ended March 31, 2011 and a decrease of $20,000 (1%) below the trailing quarter ended December 31, 2011. Average earning assets for the quarter ended March 31, 2012 were $269 million, an increase of $58 million (27%) compared to $211 million for the quarter ended March 31, 2011, and increased $30 million (12%) compared to $240 million for the trailing quarter ended December 31, 2011.

Interest expense for the quarter ended March 31, 2012 was $208,000, a decrease of $45,000 (18%) from the quarter ended March 31, 2011 and an increase of $6,000 (3%) from the trailing quarter ended December 31, 2011. Average interest bearing liabilities for the quarter ended March 31, 2012 were $152 million, an increase of $17 million (13%) compared to $135 million for the quarter ended March 31, 2011 and an increase of $16 million (12%) compared to $136 million for the trailing quarter ended December 31, 2011. While average balances of interest-bearing deposit liabilities as of March 31, 2012 increased compared to March 31, 2011, interest expense decreased due to the repricing of interest-bearing deposits, reflecting the lower interest rate environment. Average noninterest bearing deposits of $95 million grew $42 million (79%) and $14 million (17%) compared to the quarters ended March 31, 2011 and December 31, 2011, respectively.

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 quarter ended March 31, 2012 of 4.1% compared to 4.6% for the quarter ended March 31, 2011. This decrease, and the decrease from the 4.5% recorded for the trailing quarter ended December 31, 2011, are consistent with a change in the composition of earning assets as strong growth in the deposit portfolio, which now has an overall cost of just 0.34%, was temporarily deployed into Fed funds sold. During these same measurement periods, the yield on the loan portfolio has remained steady at 5.6% and the Bank continued to reduce overall deposits costs from 0.54% and 0.38% for the three month periods ended March 31, 2011 and December 31, 2011, respectively, to 0.34% for the period ended March 31, 2012.

1st Capital Bank recorded a provision for loan losses of $40,000 during the quarter ended March 31, 2012 compared to $273,000 in the quarter ended March 31, 2011 and $196,000 in the trailing quarter ended December 31, 2011. The ratio of the allowance for loan losses to total loans outstanding was 1.67% at March 31, 2012 compared to 1.64% and 1.66% at March 31, 2011 and December 31, 2011, respectively. The Bank's asset quality remained very strong, with a ratio of impaired and nonperforming loans to total loans of just 0.16% as of March 31, 2012. The Bank has never had any real estate acquired through foreclosure.

Noninterest income increased $11,000 (41%) to $38,000 for the quarter ended March 31, 2012 compared to the quarter ended March 31, 2011 and decreased $4,000 (10%) compared to the trailing quarter ended December 31, 2011, largely due to changes in the outstanding balances of non-interest bearing deposits.

Noninterest expenses increased by $620,000 (40%) to $2.2 million for the quarter ended March 31, 2012 compared to the quarter ended March 31, 2011 and increased $29,000 (1%) compared to the trailing quarter ended December 31, 2011. The majority of this increase was due to the overall growth of the Bank and the investment of the Bank in key personnel and enhanced facilities. 1st Capital Bank has added nine new employees within the last twelve months, representing a 20% increase in full-time-equivalent employees, with six of those additions occurring during the last six months. The Bank also moved its Monterey Branch and loan operations into new, larger facilities during the first quarter of 2012.

No tax provision was recorded for the quarter ended March 31, 2011 compared to a provision for income taxes of $227,000 during the quarter ended March 31, 2012.

About 1st Capital Bank

1st Capital Bank is focused on providing lending, deposit and highly efficient cash management services such as remote deposit and online banking to small-to-medium size businesses and their owners, and offers specialized banking services for the healthcare industry. The Bank is a full service financial institution with branches located in Monterey, Salinas and King City. The Bank's corporate offices are located at 5 Harris Court, Building N, Suite 3, Monterey, California 93940. Please visit our website at www.1stcapitalbank.com for more information. Member FDIC. Equal Opportunity Lender. An SBA Preferred Lender.

1ST CAPITAL BANK
CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
3 Months Ended
March 31,
Statement of Income Data 2012 2011
Interest income
Loans (including fees) $ 2,779 $ 2,527
Investment securities 103 106
Other 42 19
Total interest income 2,924 2,652
Interest expense
Interest on deposits 208 253
Other - -
Total interest expense 208 253
Net interest income 2,716 2,399
Provision for loan losses (40 ) (273 )
Net interest income after provision for loan losses 2,676 2,126
Noninterest income
Service charges on deposits 22 13
Other 16 14
Total noninterest income 38 27
Noninterest expenses
Salaries and benefits 1,302 909
Occupancy 177 138
Furniture and equipment 95 77
Other 603 433
Total noninterest expenses 2,177 1,557
Income before provision for income taxes 537 596
Provision for income taxes 227 -
Net income $ 310 $ 596
Common Share Data
Earnings per share
Basic $ 0.10 $ 0.19
Diluted $ 0.09 $ 0.18
Weighted average shares outstanding
Basic 3,222,128 3,220,853
Diluted 3,308,773 3,221,916
Book value per share $ 9.92 $ 9.88
Tangible book value $ 9.92 $ 9.88
Shares outstanding 3,222,128 3,220,853
1ST CAPITAL BANK
CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
March December
Balance Sheet Data 2012 2011
Assets
Cash and due from banks $ 5,674 $ 8,910
Federal funds sold and overnight deposits 55,417 60,062
Available-for-sale investment securities and interest bearing deposits in other banks 26,116 17,520
Loans:
Commercial 78,484 78,504
Real estate-construction 3,845 4,126
Real estate-other 118,027 115,902
Consumer 1,146 1,580
Deferred loan costs, net 478 470
Total loans 201,980 200,582
Allowance for loan losses (3,360 ) (3,320 )
Net loans 198,620 197,262
Premises and equipment, net 1,355 615
Accrued interest receivable and other assets 3,981 3,946
Total assets $ 291,163 $ 288,315
Liabilities and Shareholders' Equity
Deposits:
Demand, noninterest bearing $ 90,466 $ 118,366
Demand, interest bearing 80,196 56,171
Savings 48,158 38,558
Time 39,677 42,488
Total deposits 258,497 255,583
Accrued interest payable and other liabilities 468 919
Shareholders' equity 32,198 31,813
Total liabilities and shareholders' equity $ 291,163 $ 288,315
Asset Quality
Loans past due 90 days or more and accruing interest $ - $ -
Restructured loans 232 240
Other nonaccrual loans 93 -
Other real estate owned - -
Total nonperforming assets $ 325 $ 240
Allowance for loan losses to total loans 1.66 % 1.66 %
Allowance for loan losses to NPL's 1034 % 1383 %
Allowance for loan losses to NPA's 1034 % 1383 %
Regulatory Capital and Ratios
Tier 1 capital $ 31,891 $ 31,490
Total risk-based capital $ 34,383 33,985
Tier 1 capital ratio 16.1 % 15.8 %
Total risk based capital ratio 17.3 % 17.1 %
Tier 1 leverage ratio 11.4 % 12.6 %
1ST CAPITAL BANK
CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
3 Months Ended
March 31,
Selected Financial Ratios 2012 2011
Return on average total assets 0.44 % 1.11 %
Return on average shareholders' equity 3.87 % 8.39 %
Net interest margin 4.06 % 4.60 %
Efficiency ratio 79.05 % 64.18 %
Selected Average Balances
Loans $ 199,939 $ 181,415
Investment securities 15,732 14,191
Federal funds sold and interest bearing deposits in other banks 53,605 15,747
Total earning assets $ 269,276 $ 211,353
Total assets $ 280,238 $ 217,950
Demand deposits - interest bearing $ 69,736 $ 56,807
Savings 41,557 29,247
Time deposits 41,051 48,985
Total interest bearing liabilities $ 152,344 $ 135,039
Demand deposits - noninterest bearing $ 95,320 $ 53,081
Shareholders' equity $ 32,141 $ 28,808

Contact Information

  • Contact Information
    Jayme Fields
    CFO
    (831) 264-4011