SOURCE: 1st Enterprise Bank

1st Enterprise Bank

January 23, 2014 14:06 ET

1st Enterprise Bank Announces Net Income of $5 Million for 2013, an Increase of 34% Over 2012

LOS ANGELES, CA--(Marketwired - Jan 23, 2014) - 1st Enterprise Bank ("the Bank") (OTCQB: FENB), an independent full-service commercial bank serving the Southern California business community, reported net income of $1,187,000 for the quarter ending December 31, 2013 and full year net income of $5 million for 2013. 

Financial Highlights

  • Net income for 2013 was $5,003,000, a 34% increase over 2012 net income of $3,732,000
  • Diluted earnings per common share were $1.18 for 2013, compared to $.98 in 2012
  • Total Assets grew by 8% in 2013, ending the year at $760 million
  • Total Loans outstanding grew by $96 million or 24% in 2013, ending the year at $505 million
  • Total Deposits grew by $31 million or 5% in 2013, ending the year at $643 million
  • Net income was $1,187,000 for the fourth quarter of 2013 and diluted earnings per common share were $.28 for the quarter
  • Income before taxes, loan loss provision and gain on sale of securities was $2,267,000 for the fourth quarter, a 36% increase over the prior year and a 7% increase over the third quarter

John Black, CEO, stated, "We are very pleased to announce that 1st Enterprise Bank achieved record earnings of $5 million in 2013 and continued to generate strong loan growth, with loans increasing by $96 million, or 24% from the end of 2012. Net interest income continued to grow, as reflected in the 19% increase over the prior year. Excluding gain on the sale of securities, the Bank also grew non-interest income by 13%." Brian Horton, President, added, "In addition to our strong revenue and earnings growth, we continued to invest in our staff and our physical locations. The Bank opened a new San Fernando Valley regional loan production office during the year and added five experienced relationship managers throughout the Bank."

Net interest income before loan loss provision was $21.9 million in 2013, a $3 million or 16% 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 $85 million or 15% over 2012. Net interest margin increased from 3.23% in 2012 to 3.27% in 2013, as a result of a .03% increase in the earning asset yield and a .01% decrease in the Bank's cost of funds. The provision for loan loss was $1,322,000 in 2013, declining by $186,000 from 2012. Net loan charge-offs for 2013 were $315,000 and non-accrual loans totaled $1.8 million at December 31, 2013. 

Non-interest income, excluding gain on sale of securities, was $3.6 million in 2013, an increase of more than $400,000 or 13% over 2012. 

Non-interest expense in 2013 grew by $827,000 or 5% over 2012 to $16.9 million. The majority of this growth was increased staff and benefit expense, totaling $648,000, as the Bank continued to expand its staffing levels to support current and future customer growth. In addition, occupancy expense grew by $128,000 resulting from the new loan production office in the San Fernando Valley. 

For the quarter ended December 31, 2013, net interest income before provision was $5.8 million, an increase of $700,000 or 14% compared to the fourth quarter of 2012, and an increase of more than $300,000 or 6% compared to the third quarter of 2013. 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 $697 million in the fourth quarter of 2013, a 7% increase over the prior year and a 4% increase from the prior quarter. Net interest margin was 3.30% for the fourth quarter, compared to 3.13% and 3.23% for the prior year and prior quarter, respectively. The increase in net interest margin resulted from an increase in the earning asset yield, while cost of funds was stable at 0.11%. The provision for loan loss was $710,000 in the fourth quarter of 2013 compared to $513,000 in the fourth quarter of 2012 and $4,000 in the third quarter of 2013. There were no loan charge-offs during the fourth quarter, but one loan totaling $1.8 million was placed on non-accrual.

Non-interest income was $1 million in the fourth quarter of 2013. Excluding gains on sale of securities, non-interest income increased by $290,000 and $120,000 over the prior year and prior quarter, respectively. Non-interest expense in the fourth quarter of 2013 grew by more than $380,000 or 9% over 2012, and grew by $300,000 or 7% over the third quarter of 2013.

About 1st Enterprise Bank
Founded in 2006, 1st Enterprise Bank is a full service independent 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 and an LPO in Woodland Hills, 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   12/31/2013     9/30/2013     12/31/2012  
  Cash and due from banks   $ 12,126     $ 25,030     $ 14,520  
  Interest earning deposits in other banks     5,793       11,708       23,386  
    Total cash and cash equivalents     17,919       36,738       37,906  
                           
  Certificates of deposit in other banks     -       2,241       2,490  
  Investment securities - available-for-sale     148,809       144,462       180,491  
  Investment securities - held-to-maturity     62,118       61,274       56,026  
  Loans, net of deferred loan fees     505,258       463,998       408,767  
  Allowance for loan losses     (6,517 )     (5,805 )     (5,510 )
  Loans, net of allowance for loan losses     498,741       458,193       403,257  
  Bank owned life insurance     16,411       16,281       13,389  
  Premises and equipment, net     2,453       2,536       2,256  
  Accrued interest receivable and other assets     13,550       9,612       10,323  
    Total Assets   $ 760,001     $ 731,337     $ 706,138  
                         
Liabilities                        
  Non-interest-bearing demand deposits   $ 315,888     $ 298,662     $ 286,800  
  Interest bearing transaction accounts     39,358       36,841       39,428  
  Money market and savings accounts     277,035       282,465       274,088  
  Time deposits     10,518       11,524       11,784  
    Total Deposits     642,799       629,492       612,100  
  Federal Home Loan Bank Borrowings     44,000       30,000       24,000  
  Other liabilities     3,923       3,501       4,647  
    Total Liabilities     690,722       662,993       640,747  
                         
Shareholders' Equity                        
  Serial Preferred Stock     16,380       16,380       16,380  
  Common Stock     43,142       43,109       43,034  
  Retained Earnings     9,781       8,634       4,942  
  Accumulated other comprehensive income     (24 )     221       1,035  
    Total Shareholders' Equity     69,279       68,344       65,391  
                         
Total Liabilities and Shareholders' Equity   $ 760,001     $ 731,337     $ 706,138  
                         
                         
             
             
1st Enterprise Bank  
Condensed Statements of Operations  
$000            
    For the Years Ended  
    Unaudited     Audited  
    12/31/2013     12/31/2012  
Interest Income                
  Interest and fees on loans   $ 18,968     $ 15,355  
  Interest on investment securities     3,631       4,141  
  Other interest income     37       90  
    Total interest income     22,636       19,586  
Interest Expense     745       723  
Net Interest Income     21,891       18,862  
                 
Provision for loan losses     1,322       1,508  
                 
Net Interest Income After Provision for Loan Losses     20,569       17,355  
                 
Non-interest Income                
Service charges, fees and other income     3,555       3,138  
Gain/(Loss) on sale of investment sercurities     (8 )     899  
    Total non-interest Income     3,547       4,037  
                 
Non-interest Expenses                
  Compensation and benefit expenses     10,311       9,663  
  Occupancy and equipment expenses     1,571       1,443  
  Data processing     1,061       1,007  
  Professional and legal     1,390       1,269  
  Other operating expenses     2,559       2,683  
    Total non-interest expense     16,892       16,065  
                 
Income Before Income Taxes     7,224       5,327  
                 
Provision for income taxes     2,221       1,595  
                 
Net Income   $ 5,003     $ 3,732  
                 
Preferred dividends     164       164  
                 
Net Income Applicable to Common Shareholders   $ 4,839     $ 3,568  
                 
Earnings Per Share                
Basic earnings per share   $ 1.28     $ 1.04  
                 
Diluted earnings per share   $ 1.18     $ 0.98  
                 
Average shares outstanding     3,794,818       3,431,886  
                 
Average fully diluted shares     4,107,967       3,622,251  
                 
Total Shares outstanding at end of period     3,823,939       3,815,089  
                 
Capital Ratios                
Tier 1 leverage ratio     9.3 %     9.4 %
                 
Tier 1 risk-based capital ratio     11.0 %     12.1 %
                 
Total risk-based capital ratio     12.0 %     13.2 %
                 
Book value per share   $ 13.83     $ 12.85  
                 
Performance Ratios                
Return on average assets     0.70 %     0.60 %
                 
Return on average common equity     9.43 %     8.17 %
                 
Net interest margin     3.27 %     3.23 %
                 
Cost of Funds     0.11 %     0.13 %
                 
Efficiency ratio     66.41 %     70.16 %
                 
Average Balances                
Total Assets   $ 712,765     $ 626,527  
                 
Earning Assets     669,713       584,500  
                 
Total Loans     444,389       343,601  
                 
Total Securities     215,399       212,171  
                 
Total Deposits     621,785       560,741  
                 
Common Equity     51,334       43,677  
                 
                 
                   
 
1st Enterprise Bank    
Condensed Statements of Operations    
$000                  
    Three Months Ended  
    Unaudited  
    12/31/2013     9/30/2013     12/31/2012  
Interest Income                        
  Interest and fees on loans   $ 5,036     $ 4,780     $ 4,291  
  Interest on investment securities     944       855       963  
  Other interest income     8       11       23  
    Total interest income     5,988       5,646       5,277  
Interest Expense     189       180       174  
Net Interest Income     5,799       5,466       5,103  
                         
Provision for loan losses     710       4       513  
                         
Net Interest Income After Provision for Loan Losses     5,089       5,462       4,590  
                         
Non-interest Income                        
Service charges, fees and other income     1,024       904       733  
Gain/(Loss) on sale of investment sercurities     0       (12 )     629  
    Total non-interest Income     1,024       892       1,362  
                         
Non-interest Expenses                        
  Compensation and benefit expenses     2,846       2,584       2,543  
  Occupancy and equipment expenses     393       399       364  
  Data processing     269       268       268  
  Professional and legal     382       347       318  
  Other operating expenses     667       654       679  
    Total non-interest expense     4,557       4,252       4,172  
                         
Income Before Income Taxes     1,557       2,103       1,781  
                         
Provision for income taxes     369       715       550  
                         
Net Income   $ 1,187     $ 1,388     $ 1,230  
                         
Preferred dividends     41       41       41  
                         
Net Income Applicable to Common Shareholders   $ 1,146     $ 1,347     $ 1,189  
                         
Earnings Per Share                        
Basic earnings per share   $ 0.30     $ 0.36     $ 0.31  
                         
Diluted earnings per share   $ 0.28     $ 0.33     $ 0.29  
                         
Average shares outstanding     3,798,213       3,795,218       3,791,905  
                         
Average fully diluted shares     4,149,582       4,123,964       4,039,003  
                         
Total Shares outstanding at end of period     3,823,939       3,822,389       3,815,089  
                         
Capital Ratios                        
Tier 1 leverage ratio     9.3 %     9.6 %     9.4 %
                         
Tier 1 risk-based capital ratio     11.0 %     11.5 %     12.1 %
                         
Total risk-based capital ratio     12.0 %     12.5 %     13.2 %
                         
Book value per share   $ 13.83     $ 13.59     $ 12.85  
                         
Performance Ratios                        
Return on average assets     0.63 %     0.77 %     0.71 %
                         
Return on average common equity     8.57 %     10.37 %     9.56 %
                         
Net interest margin     3.30 %     3.23 %     3.13 %
                         
Cost of Funds     0.11 %     0.11 %     0.11 %
                         
Efficiency ratio     66.41 %     66.27 %     70.16 %
                         
Average Balances                        
Total Assets   $ 742,247     $ 713,333     $ 689,361  
                         
Earning Assets     696,826       671,798       648,523  
                         
Total Loans     477,186       448,250       389,321  
                         
Total Securities     209,826       213,618       222,696  
                         
Total Deposits     656,444       623,879       617,678  
                         
Common Equity     53,091       51,540       49,473  
                         
                         

Contact Information

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