SOURCE: Focus Business Bank

Focus Business Bank

April 29, 2010 17:00 ET

Focus Business Bank Announces Financial Results for the Quarter Ended March 31, 2010

SAN JOSE, CA--(Marketwire - April 29, 2010) -  Focus Business Bank (OTCBB: FCSB) announced unaudited financial results for the quarter ended March 31, 2010. Total assets at March 31, 2010 were $115.7 million compared to $107.9 million at December 31, 2009 and $97.8 million at March 31, 2009, increases of 7% and 18% respectively. The loss for the quarter ended March 31, 2010 was $307,000 compared to a loss of $670,000 for the trailing quarter ended December 31, 2009 and $374,000 for the prior year quarter ended March 31, 2009. President and Chief Executive Officer Richard L. Conniff remarked, "We are pleased with the improved performance of the Bank. Improving credit quality contributed to an increase in net interest income and a reduction in credit costs. Our balance sheet remains strong and we are well positioned to meet the needs of our current clients and expand our portfolio of closely-held businesses."

Following is a summary of key balance sheet categories:

  March 31, 2010   December 31, 2009   March 31, 2009
(Dollars in thousands)  (Unaudited)   (Audited)     (Unaudited)
Total assets $ 115,666   107,912   97,804
Gross loans   70,588   71,020   71,132
Allowance for loan losses   2,432   2,417   1,302
  Non-interest bearing   27,500   22,080   17,282
  Interest-bearing   63,194   64,186   55,886
    Total deposits $ 90,694   86,266   73,168
Shareholders' equity $ 21,015   21,135   24,059

Although there is evidence that the worst of the economic crisis may be behind us, management has elected to maintain high levels of liquidity to deal with continued uncertainty. The loan to deposit ratio, one measure of liquidity, was 97% at March 31, 2009, 82% at December 31, 2009 and 78% at March 31, 2010. Excess liquidity created by lowering the loan to deposit ratio has been deployed in overnight funds and investment securities. At March 31, 2010, the Bank had no brokered deposits. Secured borrowings related to the sale of SBA loans, which are subject to limited recourse provisions, totaled $3.4 million at March 31, 2010. Subsequent to the recourse period, gains from the sale of those SBA loans will be recognized and the secured borrowing will be reduced.

The allowance for loan and lease losses was 3.44% of loans outstanding at March 31, 2010, compared to 3.40% at December 31, 2009 and 1.83% at March 31, 2009. The Bank had non-performing assets of $1.6 million, 1.35% of total assets, at March 31, 2010 compared to $5.4 million, 5.00 % of total assets, at December 31, 2009. There were no non-performing assets at March 31, 2009. The $3.8 million reduction in non-performing assets in the quarter ended March 31, 2010 represents payments received from borrowers. The Bank had no OREO at March 31, 2010, December 31, 2009 or March 31, 2009. Net charge-offs in the quarters ended March 31, 2010, December 31, 2009 and March 31, 2009 were $61,000, $204,000 and $-0-, respectively.

A summary of operating results follows:

  Quarter Ended  
(Dollars in thousands except per share data) March 31, 2010   December 31, 2009   March 31, 2009  
(Unaudited)   (Audited)   (Unaudited)  
Interest income $ 1,127   953   1,005  
Interest expense   172   196   253  
Net interest income   955   757   752  
Provision for loan losses   75   275   100  
Non-interest income   38   51   44  
Non-interest expense   1,224   1,204   1,070  
Net loss $ (307 ) (670 ) (374 )
Loss per share $ (0.11 ) (0.24 ) (0.14 )

While the Bank saw an improvement in net interest income during the first quarter of 2010, approximately $119,000 of interest income related to a loan which had previously been on non-accrual and was paid in full. The net interest margin for the quarter ended March 31, 2010 was 3.56%, compared to 2.83% for the quarter ended December 31, 2009 and 3.25% for the quarter ended March 31, 2009. The Bank's net interest margin has been impacted by loans on non-accrual, historically low market rates and a decreasing loan to deposit ratio with more assets invested in lower yielding investment securities and overnight funds.

The Bank's capital ratios remain well above current regulatory guidelines for well capitalized banks. Following are the Bank's capital ratios for March 31, 2010 and December 31, 2009:

  March 31, 2010   December 31, 2009   Minimum required to be well capitalized
Tier 1 leverage ratio 18.8%   19.4%   5.0%*
Tier 1 risk-based capital ratio 26.2%   26.1%   6.0%
Total risk-based capital ratio 27.5%   27.4%   10.0%
* Minimum for the Bank during the de novo period (first seven years) is 8.00%

"The Bank's performance in the first quarter of 2010 reflects our strategy of improving asset quality and achieving measured growth while maintaining a strong balance sheet," concluded Conniff. "Focus Business Bank has continued to support its closely-held business clients with loans and other financial services through the most difficult economic period in recent history. We are gratified by the results of our efforts and appreciate the support of our customers and shareholders and the hard work of our team of business bankers."

Focus Business Bank is dedicated to meeting the banking needs of closely-held businesses and entrepreneurs in Santa Clara County. The Bank's office is located at 10 Almaden Boulevard in downtown San Jose, California and offers a variety of commercial banking products including loans, deposits, remote deposit capture and other cash management services oriented toward closely-held businesses and their owners. The Bank specializes in commercial loans and SBA 7a and 504 loans. The Bank also serves not-for-profit businesses and condominium homeowner associations by offering expertise, market knowledge and specialized products and services to these customers.

This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

Contact Information

  • Contact:
    Richard L. Conniff, President and Chief Executive Officer
    Email Contact