SOURCE: First California Financial Group, Inc.

First California Financial Group, Inc.

June 19, 2009 18:08 ET

First California Revises 2009 First Quarter Financial Results

Company Provides Outlook for 2009 Second Quarter

WESTLAKE VILLAGE, CA--(Marketwire - June 19, 2009) - First California Financial Group, Inc. (NASDAQ: FCAL), the holding company of First California Bank, today reported revised financial results for the first three months of 2009 ended March 31, reflecting higher levels of provisioning for loan losses, which contributed to a net loss for the quarter. The company also provided limited guidance for the current second quarter and said it expects to be profitable for the full year of 2009.

Summary of Revisions to 2009 First Quarter Financial Results:

--  The company added $4.0 million to its 2009 first quarter loan loss
    provision for a total provision of $5.1 million for the three-month period.
    
--  Net charge-offs increased by $1.6 million, totaling $1.8 million for
    the three months ended March 31, 2009; this resulted in a $1.4 million
    reduction in nonaccrual loans to $8.4 million as of March 31, 2009.
    
--  These actions boosted First California's allowance for loan losses to
    1.26% of total loans at March 31, 2009 from 1.00% as previously reported.
    
--  Nonaccrual loans and loans past due 90 days and accruing declined to
    $8.4 million from $9.9 million; as a percentage of loans outstanding,
    nonaccrual loans and loans past due 90 days narrowed to 0.9% from 1.1%.
    
--  Foreclosed property -- real and personal -- remained unchanged at $1.1
    million.
    
--  As a result of the additional provision, First California incurred a
    net loss of $1.9 million, or $0.18 per common share, for the 2009 first
    quarter, versus previously reported net income of $413,000, equal to $0.02
    per diluted share.
    
--  Notwithstanding the revisions, First California remains well
    capitalized; as of March 31, 2009, the total risk-based capital ratio was
    11.56% for the bank and 12.73% for the holding company.
    

"The revisions to the company's financial results were made to recognize the ongoing challenges of the broader economy and its impact on our customer base," said C. G. Kum, president and chief executive officer. "The strengthened allowance for loan losses combined with the recent addition of a highly qualified chief credit officer have positioned us better to navigate through the challenging economy."

Revised financial results, including a complete balance sheet and income statement, along with a reconciliation of the revisions made to the company's 2009 first quarter results, are attached herewith. As the company's consolidated financial statements for the first three months of 2009 are now complete, management currently anticipates that its quarterly report on Form 10-Q for the period will be filed soon.

Outlook for 2009 Second Quarter Financial Results:

--  Management anticipates recording a provision for loan losses of
    approximately $1.0 million.
    
--  Net charge-offs are expected to be approximately $500,000.
    
--  One property that served as collateral for a $5.7 million loan on non-
    accrual status as of March 31, 2009 was foreclosed upon without the need
    for charge-off and is now recorded as other real estate owned; other real
    estate owned at June 30 is expected to consist of two properties at a total
    value of $6.8 million.
    
--  One real estate construction loan in the amount of $22 million
    migrated to non-accrual status during the 2009 second quarter; management
    noted that the project is complete and represents the largest loan in the
    company's construction portfolio; no charge-off was taken on this loan.
    
--  Nonaccrual loans and loans past due 90 days and accruing are expected
    to reach $28 million at the end of the quarter, equal to approximately 3%
    of total loans.
    

Kum concluded: "The increased levels of provisioning and charge-offs in the first quarter of 2009 and as anticipated in the guidance for the second quarter demonstrate our commitment to maintaining a strong balance sheet. Notwithstanding the challenges of the current economy, we are pleased with our strong capital position and the relative health of our loan portfolio."

This outlook represents management's best estimates based on a number of assumptions that are believed to be reasonable given the most current information available. Many risks and uncertainties may cause actual results to differ materially from the company's guidance. Management further noted that this outlook is not an indication of a change in practice with regards to providing guidance in future periods.

About First California

First California Financial Group, Inc. (NASDAQ: FCAL) is the holding company of First California Bank. Celebrating 30 years of business in 2009, First California is a regional force of strength and stability in Southern California banking. With assets of $1.46 billion and led by an experienced team of bankers, the company is one of the strongest capitalized financial institutions in the region. The bank specializes in serving the comprehensive financial needs of the commercial market, particularly small- and middle-sized businesses, professional firms and commercial real estate development and construction companies. Committed to providing the best client service available in its markets, First California offers a full line of quality commercial banking products through 18 full-service branch offices in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties. The holding company's website can be accessed at www.fcalgroup.com. For additional information on First California Bank's products and services, visit www.fcbank.com.

Forward-Looking Information

This press release contains certain forward-looking information about First California that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, and include statements related to the timing of the company's filing its Form 10-Q for the period ended March 31, 2009, the company's outlook for its 2009 second quarter, whether the company has taken the appropriate actions to fully address current trends in the loan portfolio, the asset quality trends in the second half of 2009 and the company's expectation to be profitable for the full year of 2009. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of First California. First California cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to, revenues are lower than expected, credit quality deterioration which could cause an increase in the provision for credit losses, First California's ability to complete future acquisitions, successfully integrate such acquired entities, or achieve expected beneficial synergies and/or operating efficiencies within expected time-frames or at all, changes in consumer spending, borrowing and savings habits, technological changes, the cost of additional capital is more than expected, a change in the interest rate environment reduces interest margins, asset/liability repricing risks and liquidity risks, general economic conditions, particularly those affecting real estate values, either nationally or in the market areas in which First California does or anticipates doing business, including the possibility of a U.S. recession, a slowdown in construction activity, recent volatility in the credit or equity markets and its effect on the general economy, loan delinquency rates, the ability of First California and First California Bank to retain customers, demographic changes, demand for the products or services of First California and First California Bank, as well as their ability to attract and retain qualified people, competition with other banks and financial institutions, and other factors. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, First California's results could differ materially from those expressed in, or implied or projected by such forward-looking statements. First California assumes no obligation to update such forward-looking statements. For a more complete discussion of risks and uncertainties, investors and security holders are urged to read the section titled "Risk Factors" in First California's Annual Report on Form 10-K and any other reports filed by it with the Securities and Exchange Commission ("SEC"). The documents filed by First California with the SEC may be obtained at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from First California by directing a request to: First California Financial Group, Inc., 3027 Townsgate Road, Suite 300, Westlake Village, CA 91361. Attention: Investor Relations. Telephone (805) 322-9655.

(Financial Tables Follow)

                     First California Financial Group
                  Unaudited Quarterly Financial Results

(in thousands
except for share
data and ratios)
As of or for
 the quarter
 ended          31-Mar-09   31-Dec-08   30-Sep-08   30-Jun-08   31-Mar-08
                ----------  ----------  ----------  ----------  ----------

Income
 statement
 summary
Net interest
 income         $   10,670  $    9,836  $   10,348  $   10,335  $   10,263
Service charges,
 fees & other
 income              1,235       1,146       1,043         903         818
Loan commissions
 & sales                 9          69         143         185          54
Operating
 expenses           10,401       9,398       8,041       8,460       8,016
Provision for
 loan losses         5,069         200         300         200         450
Amortization of
 intangible
 assets                376         298         298         297         298
Gain (loss) on
 sale of
 securities            671          (9)        (13)          -           -
Gain (loss) on
 derivatives             -         186          (1)       (367)      1,225
                ----------  ----------  ----------  ----------  ----------
Income (loss)
 before tax         (3,261)      1,332       2,881       2,099       3,596
Tax expense
 (benefit)          (1,383)        200       1,120         815       1,407
                ----------  ----------  ----------  ----------  ----------
Net income
 (loss)         $   (1,878) $    1,132  $    1,761  $    1,284  $    2,189
                ==========  ==========  ==========  ==========  ==========

Balance sheet
 data
Total assets    $1,458,841  $1,183,401  $1,125,294  $1,125,096  $1,134,507
Shareholders'
 equity            158,181     158,923     136,680     136,229     138,256
Common
 shareholders'
 equity            134,355     133,553     135,680     135,229     137,256
Earning assets   1,285,060   1,057,198     994,212     991,740   1,005,653
  Loans            897,723     787,920     783,496     773,544     754,419
  Loans - held
   for sale         31,309      31,401           -           -      23,927
  Securities       271,743     202,462     209,736     217,896     227,032
  Federal
   funds sold
   & other          84,285      35,415         980         300         275
Interest-bearing
 funds           1,005,012     822,285     784,452     790,202     794,225
  Interest-
   bearing
   deposits        815,799     628,584     563,244     566,664     540,919
  Borrowings       162,500     167,000     194,520     196,863     226,644
  Junior
   subordinated
   debt             26,713      26,701      26,688      26,675      26,662
Goodwill and
 other
 intangibles        73,545      58,551      58,848      59,146      59,444
Deposits         1,103,578     817,595     757,765     754,115     729,819

Asset quality
 data and ratios
Loans past due
 30 to 89 days
 and accruing   $    6,395  $    2,644  $    6,560  $    1,502  $    4,646
Loans past due
 90 days and
 accruing               65         429         947       1,081       1,480
Nonaccruing
 loans               8,380       8,475       8,636       6,627       5,720
                ----------  ----------  ----------  ----------  ----------
Total past due
 and nonaccrual
 loans          $   14,840  $   11,548  $   16,143  $    9,210  $   11,846
                ==========  ==========  ==========  ==========  ==========

Repossessed
 personal
 property       $       76  $      107  $      154  $      154  $      161
Other real
 estate owned          993         220         120           -           -
                ----------  ----------  ----------  ----------  ----------
Total foreclosed
 property       $    1,069  $      327  $      274  $      154  $      161
                ==========  ==========  ==========  ==========  ==========

Net loan
 charge-offs    $    1,842  $      151  $      194  $       15  $      570
Allowance for
 loan losses    $   11,275  $    8,048  $    7,999  $    7,894  $    7,708
Allowance for
 loan losses to
 loans                1.26%       1.02%       1.02%       1.02%       1.02%

Common shareholder
 data
Basic earnings
 (loss) per
 common share   $    (0.18) $     0.10  $     0.15  $     0.11  $     0.19
Diluted earnings
 (loss) per
 common share   $    (0.18) $     0.10  $     0.15  $     0.11  $     0.19
Book value per
 common share   $    11.55  $    11.65  $    11.84  $    11.78  $    11.95
Tangible book
 value per
 common share   $     5.23  $     6.54  $     6.71  $     6.62  $     6.77
Shares
 outstanding    11,633,288  11,462,964  11,456,464  11,477,086  11,485,220
Basic weighted
 average shares 11,527,628  11,436,152  11,466,375  11,480,271  11,484,749
Diluted
 weighted
 average shares 11,813,629  11,727,614  11,744,823  11,756,817  11,757,532

Selected ratios
Return on
 average assets      -0.55%       0.39%       0.63%       0.46%       0.80%
Return on
 average equity      -4.76%       3.22%       5.14%       3.72%       6.47%
Equity to assets     10.84%      13.43%      12.15%      12.11%      12.19%
Tangible equity
 to tangible
 assets               6.11%       8.92%       7.29%       7.23%       7.33%
Tangible common
 equity to
 tangible assets      4.39%       6.67%       7.20%       7.14%       7.24%
Efficiency
 ratio               87.30%      83.63%      69.72%      76.52%      64.85%
Net interest
 margin (tax
 equivalent)          3.60%       3.90%       4.17%       4.17%       4.14%
Total
 risk-based
 capital ratio:
  First California
   Bank              11.56%      12.27%      12.89%      12.59%      12.15%
  First California
   Financial
   Group, Inc.       12.73%      16.62%      14.01%      13.81%      13.46%





                     First California Financial Group
                  Unaudited Quarterly Financial Results


(in thousands except for share data  Originally
 and ratios)                          Reported                    Final
As of or for the quarter ended        31-Mar-09   Adjustments   31-Mar-09
                                     -----------  -----------  -----------

Income statement summary
Net interest income                  $    10,670  $         -  $    10,670
Service charges, fees & other income       1,235            -        1,235
Loan commissions & sales                       9            -            9
Operating expenses                        10,401            -       10,401
Provision for loan losses                  1,115        3,954        5,069
Amortization of intangible assets            376            -          376
Gain (loss) on sale of securities            671            -          671
Gain (loss) on derivatives                     -            -            -
                                     -----------  -----------  -----------
Income (loss) before tax                     693        3,954       (3,261)
Tax expense (benefit)                        280       (1,663)      (1,383)
                                     -----------  -----------  -----------
Net income (loss)                    $       413  $     2,291  $    (1,878)
                                     ===========  ===========  ===========

Balance sheet data
Total assets                         $ 1,466,661  $    (7,820) $ 1,458,841
Shareholders' equity                     160,472       (2,291)     158,181
Common shareholders' equity              136,646       (2,291)     134,355
Earning assets                         1,286,713       (1,653)   1,285,060
   Loans                                 899,376       (1,653)     897,723
   Loans - held for sale                  31,309            -       31,309
   Securities                            271,743            -      271,743
   Federal funds sold & other             84,285            -       84,285
Interest-bearing funds                 1,005,012            -    1,005,012
   Interest-bearing deposits             815,799            -      815,799
   Borrowings                            162,500            -      162,500
   Junior subordinated debt               26,713            -       26,713
Goodwill and other intangibles            73,545            -       73,545
Deposits                               1,103,578            -    1,103,578

Asset quality data and ratios
Loans past due 30 to 89 days and
 accruing                            $     6,395  $         -  $     6,395
Loans past due 90 days and accruing           65            -           65
Nonaccruing loans                          9,791       (1,411)       8,380
                                     -----------  -----------  -----------
Total past due and nonaccrual loans  $    16,251  $    (1,411) $    14,840
                                     ===========  ===========  ===========

Repossessed personal property        $        76  $         -  $        76
Other real estate owned                      993            -          993
                                     -----------  -----------  -----------
Total foreclosed property            $     1,069  $         -  $     1,069
                                     ===========  ===========  ===========

Net loan charge-offs                 $       189  $     1,653  $     1,842
Allowance for loan losses            $     8,974  $     2,301  $    11,275
Allowance for loan losses to loans          1.00%        0.26%        1.26%

Common shareholder data
Basic earnings (loss) per common
 share                               $      0.02  $     (0.20) $     (0.18)
Diluted earnings (loss) per common
 share                               $      0.02  $     (0.20) $     (0.18)
Book value per common share          $     11.75  $     (0.20) $     11.55
Tangible book value per common share $      5.42  $     (0.19) $      5.23
Shares outstanding                    11,633,288            -   11,633,288
Basic weighted average shares         11,527,628            -   11,527,628
Diluted weighted average shares       11,813,629            -   11,813,629

Selected ratios
Return on average assets                    0.12%       -0.67%       -0.55%
Return on average equity                    1.05%       -5.81%       -4.76%
Equity to assets                           10.94%       -0.13%       10.81%
Tangible equity to tangible assets          6.24%       -0.15%        6.09%
Tangible common equity to tangible
 assets                                     4.53%       -0.15%        4.38%
Efficiency ratio                           87.30%        0.00%       87.30%
Net interest margin (tax equivalent)        3.68%       -0.08%        3.60%
Total risk-based capital ratio:
   First California Bank                   11.79%       -0.23%       11.56%
   First California Financial Group,
    Inc.                                   13.84%       -1.11%       12.73%





                     First California Financial Group
                  Unaudited Quarterly Financial Results


                                                          For the Quarter
                                                          Ended March 31,
                                                        ------------------
                                                          2009      2008
                                                        --------  ---------
 (in thousands, except per share data)
 Interest income:
    Interest and fees on loans                          $ 12,427  $  13,823
    Interest on securities                                 3,597      3,070
    Interest on federal funds sold and interest bearing
     deposits                                                 55         12
                                                        --------  ---------
         Total interest income                            16,079     16,905
                                                        --------  ---------
 Interest expense:
    Interest on deposits                                   3,367      4,249
    Interest on borrowings                                 1,555      1,954
    Interest on junior subordinated debentures               487        439
                                                        --------  ---------
         Total interest expense                            5,409      6,642
                                                        --------  ---------
         Net interest income before provision for loan
          losses                                          10,670     10,263
 Provision for loan losses                                 5,069        450
                                                        --------  ---------
         Net interest income after provision for loan
          losses                                           5,601      9,813
                                                        --------  ---------
 Noninterest income:
    Service charges on deposit accounts                    1,050        517
    Loan sales and commissions                                 9         54
    Net gain on sale of securities                           671          -
    Net gain on derivatives                                    -      1,225
    Other income                                             185        362
                                                        --------  ---------
         Total noninterest income                          1,915      2,158
                                                        --------  ---------
 Noninterest expense:
    Salaries and employee benefits                         5,658      4,567
    Premises and equipment                                 1,533      1,128
    Data processing                                          471        387
    Legal, audit, and other professional services            620        368
    Printing, stationary, and supplies                       192        151
    Telephone                                                263        138
    Directors' fees                                          115         96
    Advertising, marketing and business development          456        259
    Postage                                                   55         62
    Insurance and assessments                                309        297
    Amortization of intangible assets                        376        298
    Other expenses                                           729        624
                                                        --------  ---------
         Total noninterest expense                        10,777      8,375
                                                        --------  ---------
 Income (loss) before provision for income taxes          (3,261)     3,596
 Provision (benefit) for income taxes                     (1,383)     1,407
                                                        --------  ---------
    Net income (loss)                                   $ (1,878) $   2,189
                                                        ========  =========

 Earnings (loss) per share:
      Basic                                             $  (0.18) $    0.19
      Diluted                                           $  (0.18) $    0.19





                    First California Financial Group
                  Unaudited Quarterly Financial Results


                                                     March 31, December 31,
                                                       2009        2008
 (in thousands)                                     ----------- -----------

 Cash and due from banks                            $    48,773 $    13,712
 Federal funds sold                                      84,285      35,415
 Securities available-for-sale, at fair value           271,743     202,462
 Loans held for sale                                     31,309      31,401
 Loans, net                                             886,448     780,373
 Premises and equipment, net                             20,583      20,693
 Goodwill                                                60,705      50,098
 Other intangibles, net                                  12,840       8,452
 Deferred tax assets, net                                 3,596       2,572
 Cash surrender value of life insurance                  11,461      11,355
 Accrued interest receivable and other assets            27,098      21,512
                                                    ----------- -----------

 Total assets                                       $ 1,458,841 $ 1,178,045
                                                    =========== ===========


 Non-interest checking                              $   287,779 $   189,011
 Interest checking                                       81,670      22,577
 Money market and savings                               254,583     198,606
 Certificates of deposit, under $100,000                207,451     191,888
 Certificates of deposit, $100,000 and over             272,095     215,513
                                                    ----------- -----------
    Total deposits                                    1,103,578     817,595

 Securities sold under agreements to repurchase          45,000      45,000
 Federal Home Loan Bank advances                        117,500     122,000
 Junior subordinated debentures                          26,713      26,701
 Accrued interest payable and other liabilities           7,869       7,826
                                                    ----------- -----------

    Total liabilities                                 1,300,660   1,019,122

    Total shareholders' equity                          158,181     158,923
                                                    ----------- -----------

 Total liabilities and shareholders' equity         $ 1,458,841 $ 1,178,045
                                                    =========== ===========


Contact Information

  • For further Information:

    At the Company:
    Ron Santarosa
    805-322-9333

    At PondelWilkinson:
    Angie Yang
    310-279-5980

    Corporate Headquarters Address:
    3027 Townsgate Road, Suite 300
    Westlake Village, CA 91361