SOURCE: 1st Capital Bank

1st Capital Bank

July 19, 2012 09:00 ET

1st Capital Bank Reports Continued Growth in Core Deposits and Loans for the 2nd Quarter of 2012

MONTEREY, CA--(Marketwire - Jul 19, 2012) - 1st Capital Bank (OTCBB: FISB), Monterey County's award winning community bank, reported continued growth in core deposits and loans for the second quarter of 2012. Overall, the Bank reported an increase in total assets of 32% to $304 million as of June 30, 2012, compared to $229 million for the same quarter one year ago.

Key Performance Highlights of the Second Quarter 2012:

  • Total assets of $304 million as of June 30, 2012 increased $74 million (32%) from June 30, 2011

  • Core deposit growth of $73 million, or 37%, to a total of $270 million compared to the second quarter of 2011

  • Loan growth of $38 million, or 20%, to a total of $228 million compared to the second quarter of 2011

  • 18% increase in net interest income compared to the same quarter a year ago

  • Continuing strong asset quality, with a ratio of nonperforming loans to total loans of just 0.33%

  • Strong capital position with a total risk based capital ratio of 15.65%

  • 2% Stock dividend paid to shareholders as of March 28, 2012

"1st Capital Bank has continued its strong growth in loans, deposits and total assets. The Bank's results for the first two quarters of 2012 continue to outperform most banks in the industry," stated President and CEO Fred Rowden. "We are pleased that the investment the Bank has made in key staff and facilities in the past year has contributed to increased growth in the Bank's deposits and earning assets. That additional growth will provide the basis for future strong earnings growth. The Bank's investment in personnel and infrastructure is a part of our long-term plan to take advantage of market opportunities and is aimed at enhancing shareholder value," concluded Mr. Rowden.

In conjunction with the Bank's strong loan and deposit growth, the Bank recorded a number of increases, including a $330,000 increase in the provision for loan losses for the quarter ended June 30, 2012 compared to the same quarter in 2011. It also recorded increased non-interest costs of $404,000 from the above discussed investment in staff and facilities compared to the same quarter in the prior year and a tax expense of $152,000 for quarter ended June 30, 2012 compared to a tax benefit of $1,313,000 recorded for the same period in the prior year as a result of the deferred tax valuation allowance reversal in the prior year. These increases were partially offset by a $441,000 increase in net interest income compared to the same quarter a year ago.

Overall, increases in these key income statement categories are consistent with the Bank's plans to grow. The positive results of this planned growth are seen not only in the growing totals but also in the composition of the loan and deposit portfolios as new, quality customers join the Bank. The percentage of checking and savings accounts compared to total deposits has increased to 86% compared to 76% one year ago and the overall cost of deposits has dropped from 0.56% to 0.34%. As the Bank continues to grow it is leveraging its excess capital, as can be seen by current Total Risk Based Capital of 15.7% compared to 17.5% one year ago. Likewise, book value per share has increased to $10.10 as of June 30, 2012 compared to $9.88 one year ago.

The Bank's Financial Summary for the quarter ended June 30, 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 -- Income before taxes of $361,000 for the quarter ended June 30, 2012 compared to $660,000 for the same quarter in the prior year. This decrease is largely due to an increase in the provision for loan loss expense due to loan growth and an increase in noninterest expense, partially offset by an increase in net interest income. Net income of $209,000 for the quarter ended June 30, 2012 decreased $1,764,000 compared to net income of $1,973,000 for the same quarter in the prior year, and decreased $101,000 over the net income for the trailing quarter ended March 31, 2012. This decrease resulted from the factors outlined above, as well as increased provision for income tax as the Bank recorded a $152,000 tax expense for the second quarter 2012 compared to a tax benefit of $1,313,000 for the same period 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 $0.06 and $0.06, respectively, for the three months ended June 30, 2012 continued to add to retained earnings. These per share earnings decreased from $0.62 and $0.62, basic and fully diluted, respectively, for the same quarter a year ago.

Balance Sheet -- Total assets of $304 million as of June 30, 2012 increased $74 million (32%) from June 30, 2011 and increased $12 million (4%) from March 31, 2012. Loans grew $38 million (20%) from June 30, 2011 to a total of $228 million as of June 30, 2012, with $26 million (13%) of that growth occurring in the three-month period ended June 30, 2012. Loan growth was funded largely by deposits, which grew $73 million (37%) from June 30, 2011 to a total of $270 million as of June 30, 2012, and increased by $12 million (5%) from the balances outstanding as of March 31, 2012. As of June 30, 2012 the ratio of loans to deposits increased to 84% compared to 78% as of March 31, 2012.

Interest Income and Expense -- Net interest income for the quarter ended June 30, 2012 was $2,898,000, an increase of $441,000 (18%) over the quarter ended June 30, 2011 and an increase of $182,000 (7%) over the trailing quarter ended March 31, 2012.

Interest income for the quarter ended June 30, 2012 was $3,122,000, an increase of $392,000 (14%) over the quarter ended June 30, 2011 and an increase of $198,000 (7%) over the trailing quarter ended March 31, 2012. Average earning assets for the quarter ended June 30, 2012 were $288 million, an increase of $67 million (30%) and $18 million (7%) compared to the quarters ended June 30, 2011, and March 31, 2012, respectively.

Interest expense for the quarter ended June 30, 2012 was $224,000, a reduction of $49,000 (18%) from the quarter ended June 30, 2011 and an increase of $16,000 (8%) from the trailing quarter ended March 31, 2012. Average interest bearing liabilities for the quarter ended June 30, 2012 were $167 million, an increase of $24 million (17%) and $15 million (10%) compared to the quarters ended June 30, 2011 and March 31, 2012, respectively. While the average balances of interest-bearing deposit liabilities for the quarter ended June 30, 2012 increased compared to June 30, 2011, interest expense decreased due to the repricing of interest-bearing deposits, reflecting the Bank's continued focus on managing its net interest margin. Average noninterest bearing deposits of $97 million for the quarter ended June 30, 2012 grew $42 million (77%) and $2 million (2%) compared to the quarters ended June 30, 2011 and March 31, 2012, 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 June 30, 2012 of 4.1% compared to 4.5% for the quarter ended June 30, 2011 and 4.1% for the quarter ended March 31, 2012. This decrease from a year ago is 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 decreased 10 basis points to 5.6% while the Bank continued to reduce overall deposits costs from 0.56% for the three month period ended June 30, 2011 to 0.34% for the period ended June 30, 2012.

Provision for Loan Losses -- 1st Capital Bank recorded a provision for loan losses of $424,000 during the quarter ended June 30, 2012 compared to $94,000 in the quarter ended June 30, 2011 and $40,000 in the trailing quarter ended March 31, 2012 as growth in the loan portfolio and changes in the types of loans originated required the additional reserve and as the Bank continued to closely monitored the condition of its loan portfolio. The ratio of the allowance for loan losses to total loans outstanding was 1.66% at June 30, 2012 compared to 1.59% and 1.67% at June 30, 2011 and March 31, 2012, respectively. The Bank's asset quality remained high as compared with peers, with a ratio of impaired and nonperforming loans to total loans of just 0.33% as of June 30, 2012. The Bank has never had any real estate acquired through foreclosure.

Noninterest Income -- Noninterest income decreased $6,000 (14%) to $37,000 for the quarter ended June 30, 2012 compared to the quarter ended June 30, 2011 and decreased $1,000 (3%) compared to the trailing quarter ended March 31, 2012, largely due to changes in the volume of fees for services.

Noninterest Expense -- Noninterest expenses increased by $403,000 (23%) to $2.1 million for the quarter ended June 30, 2012 compared to the quarter ended June 30, 2011 and decreased $28,000 (1%) compared to the trailing quarter ended March 31, 2012. The majority of these increases were due to the overall growth of the Bank and the investment by the Bank in key personnel and enhanced facilities. Other expenses also increased, due largely to increased stock-based compensation and marketing costs.

Provision for Income Tax Expense -- A provision for income tax expense of $152,000 was recorded during the quarter ended June 30, 2012. This compares to the net income tax benefit of $1,313,000 that was recorded in the second quarter of 2011. Recognition of the tax benefit was a one-time event in the second quarter of 2011 resulting from removal of the valuation allowance previously recognized against the Bank's net deferred tax asset as the strength of actual and forecasted earnings eliminated the need for this valuation allowance.

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.lstcapitalbank.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     Percent Change From:     6 Months Ended  
                              June 30,        
Statement of Income Data   June 30, 2012   March 31, 2012   June 30, 2011     March 31, 2012     June 30, 2011     2012   2011     Percent
Change
 
Interest income                                                    
  Loans (including fees)   $ 2,966   $ 2,779   $ 2,599     7 %   14 %   $ 5,745   $ 5,126     12 %
  Investment securities     106     103     107     3 %   (1 %)     209     213     (2 %)
  Other     50     42     24     19 %   108 %     92     43     114 %
    Total interest income     3,122     2,924     2,730     7 %   14 %     6,046     5,382     12 %
Interest expense                                                    
  Interest on deposits     224     208     273     8 %   (18 %)     432     526     (18 %)
  Other     -     -     -                   -     -        
    Total interest expense     224     208     273     8 %   (18 %)     432     526     (18 %)
Net interest income     2,898     2,716     2,457     7 %   18 %     5,614     4,856     16 %
Provision for loan losses     424     40     94     960 %   351 %     464     367     26 %
Net interest income after provision for loan losses     2,474     2,676     2,363     (8 %)   5 %     5,150     4,489     15 %
                                                     
Noninterest income                                                    
  Service charges on deposits     21     22     16     (5 %)   31 %     43     29     48 %
  Other     16     16     27     0 %   (41 %)     32     41     (22 %)
    Total noninterest income     37     38     43     (3 %)   (14 %)     75     70     7 %
                                                     
Noninterest expenses                                                    
  Salaries and benefits     1,243     1,302     1,013     (5 %)   23 %     2,545     1,922     32 %
  Occupancy     180     177     149     2 %   21 %     357     287     24 %
  Furniture and equipment     82     95     84     (14 %)   (2 %)     177     161     10 %
  Other     645     603     500     7 %   29 %     1,248     933     34 %
    Total noninterest expenses     2,150     2,177     1,746     (1 %)   23 %     4,327     3,303     31 %
Income before provision for income taxes     361     537     660     (33 %)   (45 %)     898     1,256     (29 %)
Provision for (benefit from) income taxes     152     227     (1,313 )   (33 %)   (112 %)     379     (1,313 )   (129 %)
    Net income   $ 209   $ 310   $ 1,973     (33 %)   (89 %)   $ 519   $ 2,569     (80 %)
                                                     
Common Share Data                                                    
Earnings per share                                                    
  Basic   $ 0.06   $ 0.10   $ 0.61     (40 %)   (90 %)   $ 0.16   $ 0.80     (80 %)
  Diluted   $ 0.06   $ 0.09   $ 0.61     (33 %)   (90 %)   $ 0.16   $ 0.80     (80 %)
                                                     
Weighted average shares outstanding                                                    
  Basic     3,223,836     3,220,947     3,220,853     0 %   0 %     3,222,982     3,220,853     0 %
  Diluted     3,317,799     3,308,773     3,223,143     0 %   3 %     3,313,647     3,222,999     3 %
Book value per share                                   $ 10.10   $ 9.88     2 %
Tangible book value                                   $ 10.10   $ 9.88     2 %
                                                     
                                                     
                                                     
1ST CAPITAL BANK
CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
 
                      Percent Change From:  
    June     December     June     December 31,     June 30,  
Balance Sheet Data   2012     2011     2011     2011     2011  
Assets                                    
  Cash and due from banks   $ 6,324     $ 8,910     $ 6,025     (29 %)   5 %
  Federal funds sold and overnight deposits     42,060       60,062       16,033     (30 %)   162 %
  Available-for-sale securities, at fair value, and interest bearing deposits     25,068       17,520       15,926     43 %   57 %
  Loans:                                    
    Commercial     89,635       78,504       79,087     14 %   13 %
    Real estate-construction     4,167       4,126       3,743     1 %   11 %
    Real estate-other     132,261       115,902       105,212     14 %   26 %
    Consumer     1,254       1,580       1,017     (21 %)   23 %
    Deferred loan fees, net     517       470       426     10 %   21 %
      Total loans     227,834       200,582       189,485     14 %   20 %
    Allowance for loan losses     (3,784 )     (3,320 )     (3,022 )   14 %   25 %
  Net loans     224,050       197,262       186,463     14 %   20 %
  Premises and equipment, net     1,314       615       658     114 %   100 %
  Accrued interest receivable and other assets     4,704       3,946       4,097     19 %   15 %
Total assets   $ 303,520     $ 288,315     $ 229,202     5 %   32 %
                                     
Liabilities and Shareholders' Equity                                    
  Deposits:                                    
    Demand, noninterest bearing   $ 99,883     $ 118,366     $ 59,647     (16 %)   67 %
    Demand, interest bearing     82,024       56,171       59,280     46 %   38 %
    Savings     51,620       38,558       31,116     34 %   66 %
    Time     36,649       42,488       47,093     (14 %)   (22 %)
      Total deposits     270,176       255,583       197,136     6 %   37 %
Accrued interest payable and other liabilities     781       919       935     (15 %)   (16 %)
Shareholders' equity     32,563       31,813       31,131     2 %   5 %
Total liabilities and shareholders' equity   $ 303,520     $ 288,315     $ 229,202     5 %   32 %
                                     
Asset Quality                                    
  Loans past due 90 days or more and accruing interest   $ -     $ -     $ -              
  Restructured loans     226       240       447     (6 %)   (49 %)
  Other nonaccrual loans     534       -       -              
  Other real estate owned     -       -       -              
    Total nonperforming assets   $ 760     $ 240     $ 447     217 %   70 %
                                     
  Allowance for loan losses to total loans     1.66 %     1.66 %     1.59 %   0 %   4 %
  Allowance for loan losses to NPL's     498 %     1383 %     676 %   (64 %)   (26 %)
  Allowance for loan losses to NPA's     498 %     1383 %     676 %   (64 %)   (26 %)
                                     
Regulatory Capital and Ratios                                    
  Tier 1 capital   $ 32,188     $ 31,490     $ 30,799     2 %   5 %
  Total capital   $ 34,994     $ 33,985     $ 33,181     3 %   5 %
  Tier 1 capital ratio     14.4 %     15.8 %     16.2 %   (9 %)   (11 %)
  Total risk based capital ratio     15.7 %     17.1 %     17.5 %   (8 %)   (10 %)
  Tier 1 leverage ratio     10.8 %     12.6 %     13.6 %   (14 %)   (21 %)
                                       
                                       
                                       
1ST CAPITAL BANK
CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
 
    3 Months Ended     Percent Change From:     6 Months Ended        
                                  June 30,        
Selected Financial Ratios   June 30,
2012
    March 31,
2012
    June 30,
2011
    March 31,
2012
    June 30,
2011
    2012     2011     Percent
Change
 
  Return on average total assets     0.28 %     0.44 %     3.48 %   (36 %)   (92 %)     0.36 %     2.32 %   (84 %)
  Return on average shareholders' equity     2.59 %     3.87 %     26.74 %   (33 %)   (90 %)     3.22 %     17.74 %   (82 %)
  Net interest margin     4.1 %     4.1 %     4.5 %   (0 %)   (10 %)     4.0 %     4.5 %   (10 %)
  Efficiency ratio     73.25 %     79.05 %     69.84 %   (7 %)   5 %     76.06 %     67.05 %   13 %
                                                           
Selected Average Balances                                                          
  Loans   $ 214,583     $ 199,939     $ 184,379     7 %   16 %   $ 207,261     $ 182,905     13 %
  Investment securities     17,790       15,732       13,535     13 %   31 %     16,761       13,861     21 %
  Federal funds sold and CD's     55,218       53,605       22,508     3 %   145 %     54,412       19,147     184 %
    Total earning assets   $ 287,591     $ 269,276     $ 220,422     7 %   30 %   $ 278,434     $ 215,912     29 %
      Total assets   $ 297,159     $ 280,238     $ 227,666     6 %   31 %   $ 288,698     $ 222,834     30 %
                                                           
  Demand deposits - interest bearing   $ 81,168     $ 69,736     $ 62,750     16 %   29 %   $ 75,452     $ 59,795     26 %
  Savings     48,242       41,557       32,109     16 %   50 %     44,899       30,686     46 %
  Time deposits     37,704       41,051       47,733     (8 %)   (21 %)     39,377       48,356     (19 %)
    Total interest bearing liabilities   $ 167,114     $ 152,344     $ 142,592     10 %   17 %   $ 159,728     $ 138,837     15 %
  Demand deposits - noninterest bearing   $ 96,972     $ 95,320     $ 54,660     2 %   77 %   $ 96,146     $ 53,875     78 %
  Shareholders' equity   $ 32,513     $ 32,141     $ 29,591     1 %   10 %   $ 32,327     $ 29,202     11 %

Contact Information

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