SOURCE: 1st Capital Bank

1st Capital Bank

October 18, 2012 07:00 ET

1st Capital Bank Reports Continued Profitable Growth for the 3rd Quarter of 2012

MONTEREY, CA--(Marketwire - Oct 18, 2012) - 1st Capital Bank (OTCBB: FISB): 1st Capital Bank continued to build core relationships as it closed the third quarter of 2012 with an increase in net income of 73% over the same quarter a year ago and $303 million in total assets, representing 28% growth over the same quarter a year ago. "1st Capital's growth in earning assets continues to significantly outperform the national average for the industry," stated CEO and President Fred Rowden.

Key Performance Highlights of the Third Quarter 2012:

  • Net income increased 73% compared to the same quarter a year ago, resulting in an ROA of 0.7% for the quarter
  • Total assets increased $67 million or 28% to $303 million as of September 30, 2012 compared to September 30, 2011 
  • Total deposits grew $65 million, or 32%, to $269 million compared to the third quarter of 2011
  • Loans outstanding grew $33 million, or 17%, to a total of $234 million compared to the third quarter of 2011
  • Asset quality continued to be strong, with a ratio of nonperforming loans to total loans of just 0.31% at September 30, 2012
  • Regulatory "Well Capitalized" levels were maintained, with a total risk based capital ratio of 15.3% at September 30, 2012

As a result of the Bank's strong loan growth and reductions in the cost of interest bearing liabilities, net interest income increased by $516,000 as compared to the same quarter in the prior year. This was slightly offset by an increase in non-interest expenses of $154,000, resulting from investments in staff and facilities, since the same quarter in the prior year. Net income of $539,000 for the quarter was up 73% compared to $312,000 in the third quarter of 2011. Profits generated over the last twelve months have increased book value from $9.79 at September 30, 2011 to $10.26 as of September 30, 2012. The efficiency ratio (operating costs compared to income from operations) improved to 0.67 for the quarter ended September 30, 2012 compared to 0.75 for the same quarter one year ago.

"Despite the economic pressures the state and nation have faced, Monterey County has remained a resilient market with a strong economic base including the diversified business sectors of agriculture, hospitality, tourism, medical and education. 1st Capital Bank's role in this diversified economy has contributed to the positive results of operations of the Bank through the quarter ended September 30, 2012," said Fred Rowden, CEO and President.

During the third quarter of 2012, the Bank continued to leverage its investment in staff and infrastructure as it built new relationships that contributed to positive growth. These relationships have increased the percentage of core checking and savings accounts to 87% of total deposits compared to 78% one year ago. In addition, the overall cost of deposits has dropped from 0.50% to 0.31% during the same time period. As the Bank continues to grow it is also leveraging its capital, as evidenced by current Total Risk Based Capital of 15.3% compared to 17.1% one year ago. 

The Bank's Financial Summary for the quarter ended September 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 was $929,000 for the quarter ended September 30, 2012 compared to $547,000 for the same quarter in the prior year. This increase was largely due to an increase in interest income and a decrease in interest expense, partially offset by an increase in non-interest expense. Net income of $539,000 for the quarter ended September 30, 2012 increased $227,000 compared to net income of $312,000 for the same quarter in the prior year, and increased $330,000 over the net income for the trailing quarter ended June 30, 2012. 

Basic and fully diluted earnings per share of $0.17 and $0.16, respectively, for the three months ended September 30, 2012 continued to add to retained earnings. These per share earnings increased from $0.10, basic and fully diluted for the same quarter a year ago and $0.06 basic and fully diluted for the prior quarter.

Balance Sheet - Total assets of $303 million as of September 30, 2012 increased $67 million (28%) from September 30, 2011 and decreased $1 million (0%) from June 30, 2012. Loans grew $33 million (17%) from September 30, 2011 to a total of $234 million as of September 30, 2012, with $6 million (3%) of that growth occurring in the three-month period ended September 30, 2012. Loan growth was funded largely by increased deposits, which grew $65 million (32%) from September 30, 2011 to a total of $269 million as of September 30, 2012, and decreased by $2 million (1%) from the balances outstanding as of June 30, 2012. As of September 30, 2012, the ratio of loans to deposits increased to 87% compared to 84% as of June 30, 2012 and 99% as of September 30, 2011.

Interest Income and Expense - Net interest income for the quarter ended September 30, 2012 was $3,089,000, an increase of $516,000 (20%) over the quarter ended September 30, 2011 and an increase of $191,000 (7%) over the trailing quarter ended June 30, 2012.

Interest income for the quarter ended September 30, 2012 was $3,298,000, an increase of $473,000 (17%) over the quarter ended September 30, 2011 and an increase of $176,000 (6%) over the trailing quarter ended June 30, 2012. Average earning assets for the quarter ended September 30, 2012 were $292 million, an increase of $67 million (30%) and $5 million (2%) compared to the quarters ended September 30, 2011, and June 30, 2012, respectively.

Interest expense for the quarter ended September 30, 2012 was $209,000, a reduction of $43,000 (17%) from the quarter ended September 30, 2011 and a decrease of $15,000 (7%) from the trailing quarter ended June 30, 2012. Average interest bearing liabilities for the quarter ended September 30, 2012 were $167 million, an increase of $30 million (22%) compared to the quarter ended September 30, 2011 and unchanged from June 30, 2012. While the average balances of interest-bearing deposit liabilities for the quarter ended September 30, 2012 increased compared to September 30, 2011, interest expense decreased due to the repricing of interest-bearing deposits, reflecting the Bank's continued focus on improving its net interest margin. Average noninterest bearing deposits of $103 million for the quarter ended September 30, 2012 grew $38 million (58%) and $6 million (6%) compared to the quarters ended September 30, 2011 and June 30, 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 September 30, 2012 of 4.2% compared to 4.5% for the quarter ended September 30, 2011 and 4.1% for the quarter ended June 30, 2012. The decrease in net interest margin from a year ago was primarily the result of strong growth in the deposit portfolio during that time which resulted in an increase in liquidity that temporarily reduced the yield on earning assets and to the prolonged low interest rate environment which resulted in a decline in the loan portfolio yield. During the quarter ended September 30, 2012, the yield on the loan portfolio decreased to 5.4% compared to 5.7% for the quarter ended September 30, 2011 and 5.6% for the quarter ended June 30, 2012. Further, the Bank continued to reduce the overall cost of deposits to just 0.3% for the period ended September 30, 2012 from 0.5% and 0.3%, respectively, for the three month periods ended September 30, 2011 June 30, 2012.

Provision for Loan Losses - 1st Capital Bank recorded a provision for loan losses of $98,000 during the quarter ended September 30, 2012 compared to $102,000 in the quarter ended September 30, 2011 and $424,000 in the trailing quarter ended June 30, 2012. The provision continues to be impacted by the volume and variety of loan growth in addition to management's assessment of the condition of the loan portfolio. The ratio of the allowance for loan losses to total loans outstanding was 1.66% at September 30, 2012 compared to 1.56% and 1.66% at September 30, 2011 and June 30, 2012, respectively. The Bank's asset quality remained strong, with a ratio of impaired and nonperforming loans to total loans of only 0.31% as of September 30, 2012. The Bank has never had any real estate acquired through foreclosure.

Noninterest Income - Noninterest income increased $16,000 (50%) to $48,000 for the quarter ended September 30, 2012 compared to the quarter ended September 30, 2011 and increased $11,000 (30%) compared to the trailing quarter ended June 30, 2012, largely due to changes in the volume of fees for services.

Noninterest Expense - Noninterest expense increased $154,000 (8%) to $2.1 million for the quarter ended September 30, 2012 compared to the quarter ended September 30, 2011 and decreased $40,000 (2%) compared to the trailing quarter ended June 30, 2012. The majority of the increase over the prior year was due to the overall growth of the Bank and the investment by the Bank in key personnel and enhanced facilities. 

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   Percent Change From:     9 Months Ended  
Statement of    September 30,   June 30,   September 30,   June 30,     September 30,     September 30,     Percent  
Income Data   2012   2012   2011   2012     2011     2012   2011     Change  
Interest income                                                  
  Loans (including fees)   $ 3,153   $ 2,966   $ 2,709   6 %   16 %   $ 8,898   $ 7,835     14 %
  Investment securities     103     106     94   (3 %)   10 %     312     307     2 %
  Other     42     50     22   (16 %)   91 %     134     65     106 %
    Total interest income     3,298     3,122     2,825   6 %   17 %     9,344     8,207     14 %
Interest expense                                                  
  Interest on deposits     209     224     252   (7 %)   (17 %)     641     778     (18 %)
  Other     -     -     -                 -     -        
    Total interest expense     209     224     252   (7 %)   (17 %)     641     778     (18 %)
Net interest income     3,089     2,898     2,573   7 %   20 %     8,703     7,429     17 %
Provision for loan losses     98     424     102   (77 %)   (4 %)     562     469     20 %
Net interest income after provision for loan losses    
2,991
   
2,474
   
2,471
 
21
%  
21
%    
8,141
   
6,960
   
17
%
                                                   
Noninterest income                                                  
  Service charges on deposits     20     21     19   (5 %)   5 %     63     48     31 %
  Other     28     16     13   75 %   15 %     60     54     11 %
    Total noninterest income     48     37     32   30 %   50 %     123     102     21 %
                                                   
Noninterest expenses                                                  
  Salaries and benefits     1,290     1,243     1,107   4 %   17 %     3,835     3,029     27 %
  Occupancy     173     180     150   (4 %)   15 %     530     437     21 %
  Furniture and equipment     65     82     110   (21 %)   (41 %)     242     271     (11 %)
  Other     582     645     589   (10 %)   (1 %)     1,830     1,522     20 %
    Total noninterest expenses     2,110     2,150     1,956   (2 %)   8 %     6,437     5,259     22 %
Income before provision for income taxes     929     361     547   157 %   70 %     1,827     1,803     1 %
Provision for (benefit from) income taxes     390     152     235   157 %   66 %     769     (1,078 )   (171 %)
    Net income   $ 539   $ 209   $ 312   158 %   73 %   $ 1,058   $ 2,881     (63 %)
                                                   
Common Share Data                                                  
Earnings per share                                                  
  Basic   $ 0.17   $ 0.06   $ 0.10   183 %   70 %   $ 0.33   $ 0.89     (63 %)
  Diluted   $ 0.16   $ 0.06   $ 0.10   167 %   60 %   $ 0.32   $ 0.89     (64 %)
                                                   
Weighted average shares outstanding                                                  
  Basic     3,248,690     3,223,836     3,220,853   1 %   1 %     3,238,440     3,220,853     1 %
  Diluted     3,337,605     3,317,799     3,254,306   (1 %)   3 %     3,343,070     3,233,435     3 %
Book value per share                                 $ 10.26   $ 9.79     5 %
Tangible book value                                 $ 10.26   $ 9.79     5 %
                                                   
   
1ST CAPITAL BANK  
CONDENSED FINANCIAL DATA  
(Unaudited)  
(Dollars in thousands)  
                      Percent Change From:  

Balance Sheet Data
  September
2012
    December
2011
    September
2011
    December 31,
2011
    September 30,
2011
 
Assets                                    
  Cash and due from banks   $ 7,444     $ 8,910     $ 8,964     (16 %)   (17 %)
  Federal funds sold and overnight deposits     27,430       60,062       9,878     (54 %)   178 %
  Available-for-sale securities, at fair value, and interest bearing deposits     26,954       17,520       14,812     54 %   82 %
  Loans:                                    
    Commercial     89,117       78,504       83,873     14 %   6 %
    Real estate-construction     4,513       4,126       3,731     9 %   21 %
    Real estate-other     138,641       115,902       110,783     20 %   25 %
    Consumer     1,295       1,580       1,754     (18 %)   (26 %)
    Deferred loan costs, net     516       470       455     10 %   13 %
      Total loans     234,082       200,582       200,596     17 %   17 %
    Allowance for loan losses     (3,882 )     (3,320 )     (3,124 )   17 %   24 %
  Net loans     230,200       197,262       197,472     17 %   17 %
  Premises and equipment, net     1,325       615       567     115 %   134 %
  Accrued interest receivable and other assets     9,331       3,946       4,039     114 %   109 %
Total assets   $ 302,684     $ 288,315     $ 235,732     5 %   28 %
                                     
Liabilities and Shareholders' Equity                                    
  Deposits:                                    
    Demand, noninterest bearing   $ 102,745     $ 118,366     $ 69,047     (13 %)   49 %
    Demand, interest bearing     72,950       56,171       54,178     30 %   35 %
    Savings     58,260       38,558       35,551     51 %   64 %
    Time     34,584       42,488       44,630     (19 %)   (23 %)
      Total deposits     268,539       255,583       203,406     5 %   32 %
  Accrued interest payable and other liabilities     910       919       803     (98 %)   (98 %)
  Shareholders' equity     33,235       31,813       31,523     4 %   5 %
Total liabilities and shareholders' equity   $ 302,684     $ 288,315     $ 235,732     5 %   28 %
                                     
Asset Quality                                    
  Loans past due 90 days or more and accruing interest   $ -     $ -     $ -              
  Restructured loans     220       240       250     (8 %)   (12 %)
  Other nonaccrual loans     520       -       -              
  Other real estate owned     -       -       -              
    Total nonperforming assets   $ 740     $ 240     $ 250     208 %   196 %
                                     
  Allowance for loan losses to total loans     1.66 %     1.66 %     1.56 %   0 %   6 %
  Allowance for loan losses to NPL's     525 %     1,383 %     1,250 %   (62 %)   (58 %)
  Allowance for loan losses to NPA's     525 %     1,383 %     1,250 %   (62 %)   (58 %)
                                     
Regulatory Capital and Ratios                                    
  Tier 1 capital   $ 32,793     $ 31,490     $ 31,116     4 %   5 %
  Total capital   $ 35,723     $ 33,985     $ 33,654     5 %   6 %
  Tier 1 capital ratio     14.1 %     15.8 %     15.7 %   (11 %)   (10 %)
  Total risk based capital ratio     15.3 %     17.1 %     17.0 %   (10 %)   (10 %)
  Tier 1 leverage ratio     10.8 %     12.6 %     13.3 %   (14 %)   (19 %)
                                     
   
1ST CAPITAL BANK  
CONDENSED FINANCIAL DATA  
(Unaudited)  
(Dollars in thousands)  
                                           
    3 Months Ended     Percent Change From:     9 Months Ended        
Selected   September 30,     June 30,     September 30,     June 30,     September 30,     September 30,     Percent  
Financial Ratios   2012     2012     2011     2012     2011     2012     2011     Change  
Return on average total assets     0.71 %     0.28 %     0.53 %   150 %   34 %     0.48 %     1.70 %   72 %
Return on average shareholders' equity     6.49 %     2.59 %     3.94 %   151 %   65 %     4.33 %     12.86 %   66 %
Net interest margin     4.2 %     4.1 %     4.5 %   4 %   (7 %)     4.1 %     4.5 %   (9 %)
Efficiency ratio     67.26 %     73.25 %     75.09 %   (8 %)   (10 %)     72.93 %     69.83 %   4 %
                                                           
Selected Average Balances                                                          
Loans   $ 231,716     $ 214,583     $ 190,066     8 %   22 %   $ 215,472     $ 185,318     16 %
Investment securities     17,866       17,790       12,852     0 %   39 %     17,132       13,521     27 %
Federal funds sold and CD's     42,873       55,218       21,945     (22 %)   95 %     50,537       20,090     152 %
  Total earning assets   $ 292,455     $ 287,591     $ 224,863     2 %   30 %   $ 283,142     $ 218,929     29 %
    Total assets   $ 303,785     $ 297,159     $ 234,374     2 %   30 %   $ 293,736     $ 226,729     30 %
                                                           
Demand deposits - interest bearing   $ 77,366     $ 81,168     $ 57,815     (5 %)   34 %   $ 76,095     $ 59,127     29 %
Savings     55,170       48,242       33,291     14 %   66 %     48,348       31,564     53 %
Time deposits     35,229       37,704       45,991     (7 %)   (23 %)     37,985       47,559     (20 %)
  Total interest bearing liabilities   $ 167,765     $ 167,114     $ 137,096     0 %   22 %   $ 162,427     $ 138,250     17 %
Demand deposits - noninterest bearing     102,719       96,972       64,784     6 %   59 %     98,353       57,551     71 %
Total Deposits   $ 270,484     $ 264,086     $ 201,880     2 %   34 %   $ 260,780     $ 195,801     33 %
Shareholders' equity   $ 33,031     $ 32,513     $ 31,449     2 %   5 %   $ 32,564     $ 29,963     9 %
                                                           

Contact Information

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