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SOURCE: 1st Century Bancshares, Inc.
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March 13, 2008 08:15 ET
1st Century Bancshares Reports Results for 2007
Company Delivers Steady Growth in Loans, Deposits, Solid Asset Quality
LOS ANGELES, CA--(Marketwire - March 13, 2008) - 1st Century Bancshares, Inc. (OTCBB: FCTY),
the holding company of 1st Century Bank, N.A. (the "Bank"), today reported
continued growth and improved operating results for its fourth quarter and
the year ended December 31, 2007, which included balanced growth in loans
and deposits and a one-time $2.1 million income tax benefit.
For the 2007 fourth quarter, net income totaled $2.1 million, or $0.20 per
diluted share, versus a net loss of $591,000, or $0.06 per diluted share,
for the 2006 fourth quarter. Net income for the 2007 fourth quarter
included a $2.1 million income tax benefit related to the reversal of a
valuation allowance previously recorded against deferred tax assets. The
valuation allowance was reversed as a result of the Bank's positive
earnings trend over the last four quarters. Income before taxes for the
2007 fourth quarter was $12,000.
For the year 2007, net income increased to $2.9 million, or $0.28 per
diluted share, compared with $145,000, or $0.01 per diluted share, for
2006. Net income for 2007 included the $2.1 million income tax benefit.
"Our second consecutive year of profitability since opening 1st Century
Bank's doors in 2004 was marked by steady progress building the
organization in preparation for the company's next phase of growth," said
Alan I. Rothenberg, chairman and chief executive officer of 1st Century
Bancshares. "Importantly, the establishment of the bank holding company
will provide greater flexibility for capital planning and operational
expansion as we continue to move forward. With strong collaboration from
our highly experienced board, we believe our organization is well poised to
prudently navigate the difficult banking environment in 2008."
"Key growth drivers behind our performance in 2007 included the Bank's
targeted efforts to service the small and middle market commercial sectors,
as well as our deeply rooted connections within our high net worth customer
base," said Jason P. DiNapoli, who was promoted to chief executive officer
of 1st Century Bank earlier this year. "Stringent underwriting guidelines
are serving us well in this challenging stage of the credit cycle. The
Bank is conservatively positioned with strong loan loss reserves and
remains well capitalized.
"As 2008 unfolds, we look forward to implementing a number of operational
enhancements that we expect will further supplement our ability to create
tailored solutions and provide flexible and responsive financial services
for the communities we serve."
Net interest income before provision for loan losses increased 19% to $2.7
million for the 2007 fourth quarter from $2.3 million in the prior-year
period. For the year ended December 31, 2007, net interest income before
provision for loan losses increased 12% to $9.8 million from $8.7 million
in 2006. The increase in net interest income was primarily due to the
growth in the loan portfolio.
Principally reflecting the impact of the 100 basis point reduction in the
Federal Funds rate late in 2007, the company's net interest margin for the
2007 fourth quarter narrowed to 4.53%, from 4.59% in the immediately
preceding third quarter and from 4.76% in the fourth quarter of 2006. The
net interest margin for the 2007 year contracted to 4.51% from 4.98% in the
prior year.
The provision for loan losses totaled $203,000 for the 2007 fourth quarter,
compared with $145,000 in the prior-year period, and $701,000 for 2007,
versus $504,000 for 2006.
Non-interest income for the 2007 fourth quarter increased 78% to $135,000
from $76,000 in the year-ago comparable period. For the 2007 year,
non-interest income increased nearly three-fold to $614,000 from $209,000
in 2006, primarily reflecting loan arrangement fees of $219,000 and loan
syndication fees of $195,000 in 2007, compared with none in 2006.
Non-interest expense for the fourth quarter of 2007 declined by 7% to $2.6
million from $2.8 million in the prior-year period. The decrease was
primarily due to a reduction in Sarbanes-Oxley Act related expenses.
For the 2007 year, non-interest expense increased to $8.9 million, up 7%
from $8.3 million in 2006. The increase in non-interest expense was
primarily due to increases in compensation and benefits, technology
expenses, and FDIC assessment fees. Compensation and benefits increased by
$374,000 in 2007, compared with 2006 as a result of hiring additional
personnel to support the continued growth of the Bank. Technology expenses
increased by $243,000 year-over-year primarily due to a $150,000 expense
accrual related to the Bank's termination of a contract with its current
core processing system vendor. The Bank plans to convert its core
processing system in May 2008 as part of its efforts to improve its
operating systems and to better serve its customer base. FDIC assessment
fees increased by $92,000 as a result of an increase in total deposits and
the FDIC Insurance Reform Act of 2005, which set higher new assessment
rates effective January 1, 2007.
Gross loans continued to grow steadily and amounted to $172.4 million at
December 31, 2007, up from $128.1 million at December 31, 2006. Net loans
totaled $169.9 million at December 31, 2007, compared with $126.3 million
at December 31, 2006. The company continued to maintain solid asset
quality with no non-performing assets as of year-end 2007.
Total deposits at the close of the 2007 fourth quarter equaled $161.2
million, up from $145.1 million at December 31, 2006.
Total assets at the close of 2007 had grown 12% to $223.9 million from
$200.8 million at December 31, 2006. Shareholders' equity at December 31,
2007 increased 8% to $58.6 million from $54.1 million a year ago.
About 1st Century Bancshares, Inc.
1st Century Bancshares, Inc. is the bank holding company of 1st Century
Bank, N.A., a full service commercial bank headquartered in the Century
City area of Los Angeles. The Bank's primary focus is relationship banking
to family owned and closely held small and middle market businesses,
professional service firms and high net worth individuals, real estate
investors, medical professionals, and entrepreneurs. Additional information
is available at www.1stcenturybank.com.
Safe Harbor
Certain matters discussed in this press release constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements, include, but are not
limited to, 1st Century Bancshares' ability to provide greater flexibility
for capital planning and operational expansion, navigate the difficult
banking environment, maintain strong loan loss reserves and remain well
capitalized and implement operational enhancements. These forward-looking
statements are subject to certain risks and uncertainties that could cause
the actual results, performance or achievements to differ materially from
those expressed, suggested or implied by the forward-looking statements.
These risks and uncertainties include, but are not limited to: (1) the
impact of changes in interest rates, a decline in economic conditions and
increased competition among financial service providers on 1st Century's
operating results, ability to attract deposit and loan customers and the
quality of 1st Century's earning assets; (2) government regulation; and (3)
the other risks set forth in 1st Century's reports filed with the U.S
Securities and Exchange Commission. 1st Century does not undertake, and
specifically disclaims, any obligation to revise or update any
forward-looking statements for any reason.
Summary Financial Information
The following tables present relevant financial data from 1st Century
Bancshare's recent performance:
December 31, September 30, December 31,
2007 2007 2006
------------ ------------ ------------
Balance Sheet Results:
(Dollars in thousands except share
and per share data)
Total Assets $ 223,855 $ 228,202 $ 200,752
Gross Loans $ 172,364 $ 156,627 $ 128,135
Unearned Fee Income $ 131 $ 112 $ 155
Allowance for Loan Losses
("ALL") $ 2,369 $ 2,166 $ 1,668
Total Net Loans $ 169,864 $ 154,349 $ 126,312
Total Deposits $ 161,193 $ 171,143 $ 145,087
Non-performing Assets $ - $ - $ -
Total Shareholders' Equity $ 58,612 $ 55,378 $ 54,109
Net Loans to Deposits 105.38% 90.19% 87.06%
Allowance to Gross Loans 1.37% 1.38% 1.30%
Equity to Assets 26.18% 24.27% 26.95%
Ending Shares outstanding 9,913,884 9,898,884 9,783,722
Ending Book Value per Share $ 5.91 $ 5.59 $ 5.53
Three Months Ended
December 31,
------------------------
2007 2006
----------- -----------
Quarter Operating Results:
(Dollars in thousands except per share data)
Net Interest Income $ 2,672 $ 2,254
Provision for Loan Losses $ 203 $ 145
Non-Interest Income $ 135 $ 76
Non-interest Expense $ 2,592 $ 2,776
Income (Loss) Before Taxes $ 12 $ (591)
Income Tax Benefit $ 2,120 $ -
Net Income (Loss) $ 2,133 $ (591)
Basic Income (Loss) per Share $ 0.21 $ (0.06)
Diluted Income (Loss) per Share $ 0.20 $ (0.06)
Quarterly Return on Average Assets* 3.57% (1.20%)
Quarterly Return on Average Equity* 15.09% (4.32%)
Quarterly Net Interest Margin* 4.53% (4.76%)
Years Ended
December 31,
------------------------
2007 2006
----------- -----------
YTD Operating Results:
(Dollars in thousands except per share data)
Net Interest Income $ 9,770 $ 8,720
Provision for Loan Losses $ 701 $ 504
Non-interest Income $ 614 $ 209
Non-interest Expense $ 8,891 $ 8,280
Income Before Taxes $ 792 $ 145
Income Tax Benefit $ 2,120 $ -
Net Income $ 2,912 $ 145
Basic Income per Share $ 0.30 $ 0.01
Diluted Income per Share $ 0.28 $ 0.01
YTD Return on Average Assets* 1.32% 0.08%
YTD Return on Average Equity* 5.30% 0.27%
YTD Net Interest Margin* 4.51% 4.98%
*Percentages are reported on an annualized basis.