SOURCE: Focus Business Bank

Focus Business Bank

May 03, 2011 19:41 ET

Focus Business Bank Announces Financial Results for the Quarter Ended March 31, 2011

SAN JOSE, CA--(Marketwire - May 3, 2011) - Focus Business Bank (OTCBB: FCSB) announced unaudited financial results for the quarter ended March 31, 2011. The Bank reported net income of $51,000, or $0.02 per share, for the quarter ended March 31, 2011 compared to a loss of $307,000, or ($0.11) per share, for the quarter ended March 31, 2010.

President and Chief Executive Officer Richard L. Conniff stated, "The Bank posted positive net income for the fourth consecutive quarter as it emerges from its start-up phase and the impact of a difficult economy. We are pleased with the continued progress of our core operations and the solid growth in our balance sheet. We are well positioned to meet the banking needs of closely held businesses."

Assets and Liabilities

Total assets increased to $135,819,000 at March 31, 2011, a 17% increase from March 31, 2010. Total deposits grew to $111,193,000 at March 31, 2011, a 23% increase from March 31, 2010. Total loans were $71,229,000 at March 31, 2011, an increase of 1% from March 31, 2010 and 7% from December 31, 2010.

Net Interest Income

The Bank's primary source of earnings is net interest income, the difference between interest earned on interest earning assets, primarily investments and loans, less interest paid on interest bearing liabilities, primarily deposits. Net interest income for the quarter ended March 31, 2011 was $986,000, compared to $970,000 and $955,000 for the quarters ended December 31, 2010 and March 31, 2010, respectively. The net interest margin (net interest income divided by average earning assets) for the quarters ended March 31, 2011, December 31, 2010 and March 31, 2010 was 3.05%, 3.05% and 3.56% respectively. The decline in net interest margin from March 31, 2010 to March 31, 2011 is primarily attributable to the Bank's high level of liquidity as evidenced by the loan to deposit ratio of 64% at March 31, 2011, compared to 78% at March 31, 2010.

Non-interest Income

Non-interest income was $539,000 and $37,000 for the quarters ended March 31, 2011 and March 31, 2010, respectively. The increase in non-interest income in the quarter ending March 31, 2011 compared to the quarter ending March 31, 2010 is primarily attributable to gains on the sale of the guaranteed portion of SBA loans which were $459,000 for the quarter ended March 31, 2011. SBA originations have increased over the past year as the result of incentives offered by the SBA to stimulate borrowing by small businesses. Focus Business Bank is an SBA preferred lender.

Non-Interest Expense

Non-interest expense was $1,474,000 for the quarter ended March 31, 2011 compared to $1,171,000 and $1,224,000 for the quarters ending December 31, 2010 and March 31, 2010, respectively. The increase in non-interest expense in the quarter ended March 31, 2011 is primarily attributable to personnel and marketing expenses during the quarter.

Asset Quality

The Bank made no provision to loan loss reserves in the quarter ended March 31, 2011 as compared to a reversal of loan loss reserves of $125,000 in the quarter ending December 31, 2010. The allowance for loan and lease losses was 3.57% of total loans at March 31, 2011 as compared to 3.83% at December 31, 2010. There were no loan charge-offs in the quarter ending March 31, 2011. Non-performing loans at March 31, 2011 were $84,000, or 0.12% of total loans compared to $1,141,000, or 1.62% of total loans, at March 31, 2010.

Capital

Focus Business Bank has capital ratios substantially in excess of regulatory requirements for well capitalized banks. At March 31, 2011, the total risk-based capital ratio was 25.02%.

About Focus Business Bank

Focus Business Bank is dedicated to meeting the banking needs of closely-held businesses and professionals 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.

Forward-Looking Statements

This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement. 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.


                            Focus Business Bank
                       Summary Financial Statements

(Unaudited)                             As of
                     -------------------------------------------
                                                                  12 Month
BALANCE SHEET          31-Mar-11      31-Dec-10      31-Mar-10    % Change
                     -------------  -------------  -------------  --------

ASSETS
Cash and due from
 banks
  Interest bearing   $  26,484,000  $  34,061,000  $  21,706,000        22%
  Non-interest
   bearing               3,190,000      1,716,000      1,846,000        73%
Federal funds sold         505,000        510,000        510,000        -1%
Investment
 securities             35,210,000     30,289,000     21,751,000        62%
Loans                   71,229,000     66,387,000     70,588,000         1%
  Net deferred loan
   costs                   184,000        138,000        119,000        54%
  Allowance for loan
   losses               (2,541,000)    (2,541,000)    (2,431,000)        5%
                     -------------  -------------  -------------
    Net Loans           68,872,000     63,984,000     68,276,000         1%
Other assets             1,558,000      1,338,000      1,577,000        -1%
                     -------------  -------------  -------------

TOTAL ASSETS         $ 135,819,000  $ 131,898,000  $ 115,666,000        17%
                     =============  =============  =============

LIABILITIES
Deposits
  Non-interest
   bearing           $  38,501,000  $  31,982,000  $  27,501,000        40%
  Interest bearing      72,692,000     77,824,000     63,194,000        15%
                     -------------  -------------  -------------
    Total deposits     111,193,000    109,806,000     90,695,000        23%
Other liabilities        2,985,000        601,000      3,957,000       -25%
                     -------------  -------------  -------------
TOTAL LIABILITIES      114,178,000    110,407,000     94,652,000
Shareholders' equity    21,641,000     21,491,000     21,014,000         3%
                     -------------  -------------  -------------

LIABILITIES AND
 SHAREHOLDERS'
 EQUITY              $ 135,819,000  $ 131,898,000  $ 115,666,000        17%
                     =============  =============  =============
Book value/share     $        7.82  $        7.77  $        7.60         3%

Balance Sheet Ratios
  Loan/deposit                  64%            60%            78%
  Non-interest
   bearing/total
   deposit                      35%            29%            30%

Regulatory Capital
 Ratios
  Tier-1 leverage            15.93%         16.53%         18.83%
  Tier-1 risk based
   capital                   23.75%         27.19%         26.20%
  Total risk-based
   capital                   25.02%         28.46%         27.50%

Asset Quality
 Metrics
  Non-performing
   loans             $      84,000  $      86,000  $   1,141,000       -93%
  Non-performing
   loans/total loans          0.12%          0.13%          1.62%
  ALLL/total loans            3.57%          3.83%          3.44%




                            Focus Business Bank
                       Summary Financial Statements

(Unaudited)                                      Quarter ended
                                     -------------------------------------
STATEMENT OF OPERATIONS               31-Mar-11    31-Dec-10    31-Mar-10
                                     -----------  -----------  -----------

Interest income                      $ 1,110,000  $ 1,090,000  $ 1,127,000
Interest expense                         124,000      120,000      172,000
                                     -----------  -----------  -----------
  Net interest income                    986,000      970,000      955,000
Provision for loan losses                      -     (125,000)      75,000
Non-interest income                      539,000       97,000       37,000
Non-interest expense                   1,474,000    1,171,000    1,224,000
                                     -----------  -----------  -----------
    Net income (loss)                $    51,000  $    21,000  $  (307,000)
                                     ===========  ===========  ===========
Net income (Loss) per basic share    $      0.02  $      0.01  $     (0.11)

Performance Metrics
  Net interest margin                       3.05%        3.05%        3.56%
  Return on average assets                  0.15%        0.06%       -1.13%
  Return on average equity                  0.96%        0.38%       -5.91%

Contact Information

  • Contact:
    Richard L. Conniff
    President and Chief Executive Officer
    408.200.8701
    Email Contact