SOURCE: 1st Enterprise Bank

1st Enterprise Bank

January 31, 2013 13:29 ET

1st Enterprise Bank Announces Net Income of $3.7 Million for 2012, an Increase of 18% Over 2011

LOS ANGELES, CA--(Marketwire - Jan 31, 2013) - 1st Enterprise Bank ("the Bank") (OTCBB: FENB), an independent full-service commercial bank serving the Southern California business community, announced full year net income of $3.7 million for 2012, an 18% increase over 2011.

Financial Highlights

  • Net income for 2012 was $3,732,000, an 18% increase over 2011 net income of $3,152,000
  • Diluted earnings per common share were $.98 for 2012, compared to $.85 in 2011
  • Net income was $1,230,000 for the fourth quarter of 2012, a 28% increase over the fourth quarter of 2011 and a 90% increase over the third quarter of 2012
  • Diluted earnings per common share were $.29 for the fourth quarter, compared to $.32 for the fourth quarter of 2011 and $.15 for the third quarter of 2012
  • Total Assets grew by 25% in 2012, ending the year at $706 million
  • Total Loans outstanding grew by 40% in 2012, ending the year at $409 million
  • Total Deposits grew by 23% in 2012, ending the year at $612 million
  • The Bank continues to be well capitalized with a Tier 1 Leverage Ratio of 9.4% and Total Risk Based Capital Ratio of 13.2%

John Black, CEO, stated, "We are pleased to announce that 1st Enterprise Bank achieved record full year earnings of $3.7 million in 2012 and record quarterly earnings of $1.2 million in the fourth quarter. The Bank continued to generate strong growth in both loans and deposits, as loans grew by an annualized rate of 29% and deposits grew by 14%, during the fourth quarter of 2012. Net interest income continued to grow, as reflected in the 25% increase over the prior year. Excluding gain on the sale of securities, the Bank grew non-interest income by 42%. In addition to our strong financial performance during 2012, we also were successful in adding five highly experienced bankers to our team. They included two experienced commercial relationship managers that will open and lead our new San Fernando regional loan production office opening in March of this year."

Net interest income before provision was $18.9 million in 2012, a $3.9 million or 26% increase over the prior year. The growth in net interest income was the result of both growth in earning assets and an increase in net interest margin. Earning assets grew by $93 million or 19% over 2011. Net interest margin increased from 3.03% in 2011 to 3.23% in 2012, as a result of both an increase in the earning asset yield and a decrease in the Bank's cost of funds. The provision for loan loss was $1,508,000 in 2012, a $373,000 increase over 2011. Net loan charge-offs for 2012 and for the fourth quarter totaled $598,000 and non-accrual loans totaled $471,000 at December 31, 2012. "While we were disappointed to have experienced our first charge-off and non-accrual loans (all related to the same borrower), these levels are still far below industry averages, as reflected in the net charge-off ratio of 0.17% for all of 2012 and a non-performing asset ratio of 0.44% at year end," stated Mr. Black.

Non-interest income, excluding gain on sale of securities was $3.1 million in 2012, an increase of more than $900,000 or 42% over 2011. Gain on sale of securities was approximately $900,000 in 2012, a 24% decline from the $1.2 million in gains recorded in 2011.

Non-interest expense grew by $3 million over 2011 to $16 million for 2012. The majority of this growth was attributable to increased staff and benefit expense as the Bank continued to expand its staffing levels to maintain high levels of customer service and to accommodate continued growth in the coming years. 

For the three months ended December 31, 2012, net interest income before provision was $5.1 million, an increase of more than $1 million or 25% compared to the fourth quarter of 2011 and an increase of more than $300,000 or 6% compared to the third quarter of 2012. The growth in net interest income was the result of both growth in earning assets and an increase in net interest margin. Average earning assets were $649 million in the fourth quarter of 2012, a 22% increase over the prior year and a 4% increase from the prior quarter. Net interest margin was 3.13% for the fourth quarter, compared to 3.04% and 3.08% for the prior year and prior quarter, respectively. The increase in net interest margin resulted from both an increase in the earning asset yield and a decrease in the Bank's cost of funds. The provision for loan loss was $513,000 in the fourth quarter of 2012 compared to $565,000 in the fourth quarter of 2011 and $745,000 in the third quarter of 2012.

Non-interest income was $1.4 million in the fourth quarter of 2012, including gains on sale of securities of $629,000. Excluding the gains, non-interest income declined by $36,000 and $194,000 over the prior year and prior quarter, respectively. Non-interest expense in the fourth quarter of 2012 grew by more than $800,000 or 26% over 2011, but grew by only 2% over the third quarter of 2012.

Brian Horton, President, concluded, "We are very pleased with these results and the Bank's ability to successfully navigate the economic headwinds that we have faced the last five years. We want to thank our loyal staff for their efforts and our loyal customers, because they are the drivers of our success."

About 1st Enterprise Bank
Founded in 2006, 1st Enterprise Bank is a full service commercial banking institution, whose highly experienced bankers personally serve Southern California entrepreneurial businesses, professional firms and nonprofit organizations, along with their owners and key managers. Headquartered in the Los Angeles financial district, with full service regional banking offices in Irvine and Ontario, 1st Enterprise Bank offers a full range of credit and depository services, with special emphasis on superior customer service, sophisticated cash management services and direct access to bank decision makers. Customers work directly with a dedicated Relationship Manager, a seasoned professional who understands their unique challenges serving as a sounding board and an active participant in their client's success. For more information on 1st Enterprise Bank, please visit www.1stenterprisebank.com.

Forward-Looking Statement:
This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about 1st Enterprise Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: 1st Enterprise Bank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in 1st Enterprise Bank's reports and filings with banking regulatory agencies. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and 1st Enterprise Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

   
   
1st Enterprise Bank  
Condensed Statements of Financial Condition  
$000            
                   
    Unaudited     Unaudited     Audited  
Assets   12/31/2012     9/30/2012     12/31/2011  
  Cash and due from banks   $ 14,520     $ 21,058       17,344  
  Interest earning deposits in other banks     23,386       15,357       8,389  
    Total cash and cash equivalents     37,906       36,415       25,733  
                           
  Certificates of deposit in other banks     2,490       498       5,522  
  Investment securities - available-for-sale     180,491       167,518       173,155  
  Investment securities - held-to-maturity     56,026       56,114       53,127  
  Loans, net of deferred loan fees     408,767       381,307       292,587  
  Allowance for loan losses     (5,510 )     (5,595 )     (4,600 )
  Loans, net of allowance for loan losses     403,257       375,712       287,987  
  Bank owned life insurance     13,389       13,276       10,462  
  Premises and equipment, net     2,256       2,274       2,464  
  Accrued interest receivable and other assets     10,323       10,022       8,611  
    Total Assets   $ 706,138     $ 661,829     $ 567,061  
                         
Liabilities                        
  Non-interest-bearing demand deposits   $ 286,800     $ 273,197     $ 215,355  
  Interest bearing transaction accounts     39,428       43,884       37,075  
  Money market and savings accounts     274,088       264,056       233,537  
  Time deposits     11,784       10,739       10,976  
    Total Deposits     612,100       591,876       496,943  
  Federal Home Loan Bank Borrowings     24,000       -       17,000  
  Other liabilities     4,647       4,913       2,881  
    Total Liabilities     640,747       596,789       516,824  
                         
Shareholders' Equity                        
  Serial Preferred Stock     16,380       16,380       16,380  
  Common Stock     43,034       43,008       30,958  
  Retained Earnings     4,942       3,752       1,374  
  Accumulated other comprehensive income     1,035       1,900       1,525  
    Total Shareholders' Equity     65,391       65,040       50,237  
                         
Total Liabilities and Shareholders' Equity   $ 706,138     $ 661,829     $ 567,061  
                         
             
   
1st Enterprise Bank  
Condensed Statements of Operations  
$000            
    For the Years Ended  
    Unaudited     Audited  
    12/31/2012     12/31/2011  
Interest Income                
  Interest and fees on loans   $ 15,355     $ 11,536  
  Interest on investment securities     4,141       4,423  
  Other interest income     90       149  
    Total interest income     19,586       16,108  
Interest Expense     723       1,120  
Net Interest Income     18,862       14,988  
                 
Provision for loan losses     1,508       1,135  
                 
Net Interest Income After Provision for Loan Losses     17,355       13,853  
                 
Non-interest Income                
Service charges, fees and other income     3,138       2,210  
Gain on sale of investment sercurities     899       1,177  
    Total non-interest Income     4,037       3,387  
                 
Non-interest Expenses                
  Compensation and benefit expenses     9,663       7,513  
  Occupancy and equipment expenses     1,443       1,325  
  Data processing     1,007       818  
  Professional and legal     1,269       1,226  
  Other operating expenses     2,683       2,138  
    Total non-interest expense     16,065       13,020  
                 
Income Before Income Taxes     5,327       4,220  
                 
Provision for income taxes     1,595       1,067  
                 
Net Income   $ 3,732     $ 3,152  
                 
Preferred dividends & Warrant amortization     164       655  
                 
Net Income Applicable to Common Shareholders   $ 3,568     $ 2,497  
                 
Earnings Per Share                
Basic earnings per share   $ 1.04     $ 0.89  
                 
Diluted earnings per share   $ 0.98     $ 0.85  
                 
Average shares outstanding     3,431,886       2,818,497  
                 
Average fully diluted shares     3,622,251       2,951,985  
                 
Total Shares outstanding at end of period     3,815,089       2,848,500  
                 
Capital Ratios                
Tier 1 leverage ratio     9.4 %     8.5 %
                 
Tier 1 risk-based capital ratio     12.1 %     12.0 %
                 
Total risk-based capital ratio     13.2 %     13.2 %
                 
Book value per share   $ 12.85     $ 11.89  
                 
Performance Ratios                
Return on average assets     0.60 %     0.59 %
                 
Return on average common equity     8.17 %     7.62 %
                 
Net interest margin     3.23 %     3.03 %
                 
Cost of Funds     0.13 %     0.23 %
                 
Efficiency ratio     70.16 %     70.86 %
                 
Average Balances                
Total Assets   $ 626,527     $ 534,397  
                 
Earning Assets     584,500       491,909  
                 
Total Loans     343,601       245,632  
                 
Total Securities     212,171       229,754  
                 
Total Deposits     560,741       484,172  
                 
Common Equity     43,677       32,774  
                 
                   
                   
1st Enterprise Bank        
Condensed Statements of Operations        
$000                  
    Three Months Ended  
    Unaudited  
    12/31/2012     9/30/2012     12/31/2011  
Interest Income                        
  Interest and fees on loans   $ 4,291     $ 3,957     $ 3,150  
  Interest on investment securities     963       987       1,136  
  Other interest income     23       35       18  
    Total interest income     5,277       4,979       4,304  
Interest Expense     174       179       231  
Net Interest Income     5,103       4,800       4,073  
                         
Provision for loan losses     513       745       565  
                         
Net Interest Income After Provision for Loan Losses     4,590       4,055       3,508  
                         
Non-interest Income                        
Service charges, fees and other income     733       927       769  
Gain on sale of investment sercurities     629       18       0  
    Total non-interest Income     1,362       945       769  
                         
Non-interest Expenses                        
  Compensation and benefit expenses     2,543       2,341       1,912  
  Occupancy and equipment expenses     364       359       352  
  Data processing     268       278       222  
  Professional and legal     318       417       368  
  Other operating expenses     679       683       451  
    Total non-interest expense     4,172       4,078       3,305  
                         
Income Before Income Taxes     1,781       922       972  
                         
Provision for income taxes     550       273       11  
                         
Net Income   $ 1,230     $ 649     $ 961  
                         
Preferred dividends & Warrant amortization     41       41       41  
                         
Net Income Applicable to Common Shareholders   $ 1,189     $ 608     $ 920  
                         
Earnings Per Share                        
Basic earnings per share   $ 0.31     $ 0.16     $ 0.33  
                         
Diluted earnings per share   $ 0.29     $ 0.15     $ 0.32  
                         
Average shares outstanding     3,791,905       3,790,359       2,818,500  
                         
Average fully diluted shares     4,039,003       4,002,707       2,843,250  
                         
Total Shares outstanding at end of period     3,815,089       3,814,539       2,848,500  
                         
Capital Ratios                        
Tier 1 leverage ratio     9.4 %     9.6 %     8.5 %
                         
Tier 1 risk-based capital ratio     12.1 %     12.1 %     12.0 %
                         
Total risk-based capital ratio     13.2 %     13.3 %     13.2 %
                         
Book value per share   $ 12.85     $ 12.76     $ 11.89  
                         
Performance Ratios                        
Return on average assets     0.71 %     0.39 %     0.66 %
                         
Return on average common equity     9.56 %     4.97 %     10.85 %
                         
Net interest margin     3.13 %     3.08 %     3.04 %
                         
Cost of Funds     0.11 %     0.12 %     0.18 %
                         
Efficiency ratio     70.16 %     72.37 %     70.86 %
                         
Average Balances                        
Total Assets   $ 689,361     $ 660,792     $ 575,479  
                         
Earning Assets     648,523       620,656       531,685  
                         
Total Loans     389,321       356,425       268,464  
                         
Total Securities     222,696       210,271       242,694  
                         
Total Deposits     617,678       591,691       521,104  
                         
Common Equity     49,473       48,692       33,652  

Contact Information

  • Contact:
    John C. Black
    CEO
    213-430-7000