SOURCE: Focus Business Bank

April 23, 2008 21:25 ET

Focus Business Bank Announces Financial Results for the Quarter Ended March 31, 2008

SAN JOSE, CA--(Marketwire - April 23, 2008) - Focus Business Bank (OTCBB: FCSB) announced unaudited financial results for the quarter ended March 31, 2008. The Bank's President and Chief Executive Officer Richard L. Conniff stated, "Focus Business Bank continues to show positive trends. Current economic conditions are challenging but we are building the Bank for the long term, recognizing that successful financial institutions must be able to adapt to difficult conditions that are beyond their immediate control. We believe strongly in our business model and the closely-held businesses in Santa Clara County which we serve." The Bank opened for business on January 16, 2007. Following is a summary of key balance sheet categories as of March 31, 2007, December 31, 2007 and March 31, 2008:

Unaudited
 (All dollars in                              As of
  thousands)           March 31, 2007   December 31, 2007   March 31, 2008
                       --------------   -----------------   --------------
Gross loans                  $    845            $ 33,613         $ 40,664
Allowance for loan
 loss                              10                 400              490
Deposits
  Non-interest bearing          3,010              11,740           11,367
  Interest-bearing             19,090              33,299           31,394
                       --------------   -----------------   --------------
    Total                      22,100              45,039           42,761
Shareholders' equity           26,402              25,514           25,528
Total assets                   48,681              70,851           68,633

While the Bank achieved strong loan growth during the first quarter of 2008, deposits declined as the result of lower balances in several large relationships and seasonal factors, including deposit withdrawals related to the payment of real estate property taxes and income taxes. The Bank continues to emphasize the development of new deposit relationships which will provide growth in earning assets and reduce the volatility of balances going forward. The Bank has continued to invest in remote deposit capture, positive pay and other cash management products to support its efforts to grow deposits.

Following is a summary of operating results for the prior year and linked quarters:

Unaudited
 (All dollars in                          Quarter ended
  thousands)           March 31, 2007   December 31, 2007   March 31, 2008
                       --------------   -----------------   --------------
Interest income                $  377              $  965           $  953
Interest expense                   65                 273              230
                       --------------   -----------------   --------------
  Net interest income             312                 692              723
Provision for loan
 losses                            10                 158               90
Non-interest income                (3)                  3               82
Non-interest expense            1,518                 949            1,004
                       --------------   -----------------   --------------
    Net income                 (1,220)               (411)            (289)
                       ==============   =================   ==============
(Loss) per basic share         ($0.44)             ($0.15)          ($0.11)

The Bank's primary source of revenue, net interest income, increased by $31,000 (4%) in the quarter ended March 31, 2008 as compared to the quarter ended December 31, 2007. The increase was attributable to a higher net interest margin of 4.29% in the quarter ended March 31, 2008 as compared to a net interest margin of 4.16% for the quarter ended December 31, 2007. Although market rates of interest declined from December 31, 2007 to March 31, 2008, the mix of earning assets contained a larger percentage of higher yielding assets, including loans and investment securities, in the first quarter of 2008 as compared to the fourth quarter of 2007. The majority of the Bank's loans are indexed to the prime rate, which decreased from 8.25% at March 31, 2007 to 7.25% at December 31, 2007 and 5.25% at March 31, 2008.

Asset quality at Focus Business Bank remained high through the first quarter of 2008. The Bank had no non-performing or adversely classified loans and no past-due loans. President Conniff stated, "The slowing economy has made it challenging to grow. While lending opportunities are more difficult to come by, we believe disciplined credit underwriting is a critical success factor. We will continue to build the Bank on relationships with high quality closely held businesses in Santa Clara County in the belief that it is the best way to create long term shareholder value."

Focus Business Bank is dedicated to meeting the banking needs of closely held businesses and entrepreneurs in Santa Clara County. The Bank has one office located 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, SBA 7a and 504 loans and interim construction loans.

This release may contain forward-looking statements that 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
    408.200.8701
    Email Contact