SOURCE: Focus Business Bank

Focus Business Bank

February 02, 2011 03:31 ET

Focus Business Bank Announces Financial Results for the Quarter and Year Ended December 31, 2010

SAN JOSE, CA--(Marketwire - February 2, 2011) - Focus Business Bank (OTCBB: FCSB) announced unaudited financial results for the quarter and year ended December 31, 2010. The Bank reported net income of $21,000, or $0.01 per share, for the quarter ended December 31, 2010 compared to $52,000, or $0.02 per share, for the trailing quarter ended September 30, 2010. For the year ended December 31, 2010, the Bank reported a loss of $203,000, or ($0.07) per share, compared to a loss of $3,641,000, or ($1.32) per share, for the year ended December 31, 2009.

President and Chief Executive Officer Richard L. Conniff stated, "2010 was a year of transition for Focus Business Bank. Our primary objectives in 2010 were to improve asset quality, improve earnings and continue to grow. We now look back at 2010 and see significant achievement on all fronts. Most importantly, we enter 2011 with a balance sheet well positioned to take advantage of opportunities as they arise and a business plan focused on continuing improvement."

Assets and Liabilities

Total assets increased to $131,898,000 at December 31, 2010, a 22% increase from $107,912,000 at December 31, 2009. Total deposits grew to $109,806,000 at December 31, 2010, a 27% increase from $86,266,000 at December 31, 2009. Non-interest bearing demand deposits, a key measure of balance sheet growth, were $31,982,000 at December 31, 2010, an increase of 45% from December 31, 2009.

Total loans were $66,525,000 at December 31, 2010, a decline of 7% from $71,169,000 at December 31, 2009. Mr. Conniff noted, "The Bank was challenged to grow loans in 2010. While the Bank actively sought new borrowing customers, demand for loans was low as many companies remained weary of expansion during a time of economic volatility. Significant effort was directed towards improving the Bank's asset quality, particularly in the first half of the year, which resulted in the repayment of many loans. In addition, the Bank elected to reduce its concentration in land and construction loans which declined from over 15% of total loans at December 31, 2009 to approximately 2% at December 31, 2010."

At December 31, 2010, the Bank had liquid assets including investment securities and interest bearing deposits with other banks of $64,350,000. The loan to deposit ratio at December 31, 2010 was 60% as compared to 82% at December 31, 2009.

Net Interest Income

The Bank's primary source of earnings is net interest income, the difference between interest earned on loans and investments (earning assets) less interest paid on interest bearing liabilities, primarily deposits. Net interest income for the year ended December 31, 2010 was $3,855,000, a 26% increase over the year ended December 31, 2009. The increase in net interest income from 2009 to 2010 is primarily attributable to an increase in earning assets. The net interest margin, net interest income divided by average earning assets, for the years ended December 31, 2010 and December 31, 2009 was 3.29% and 3.01%, respectively.

Non-interest Income

For the year ended December 31, 2010, non-interest income was $464,000 as compared to $272,000 for the year ended December 31, 2009. The difference in non-interest income from 2009 to 2010 is attributable to increases in the volume of sales of the guaranteed portion of SBA loans originated by the Bank.

Non-Interest Expense

Non-interest expense was $4,722,000 for the year ended December 31, 2010 compared to $4,720,000 for the year ended December 31, 2009, a difference of less than 1%. The Bank carefully controlled expenses while achieving significant asset growth in 2010.

Asset Quality

During 2010, the Bank has successfully reduced non-performing loans from $5,366,000, or 7.54% of total loans, at December 31, 2009 to $86,000, 0.13% of total loans, at December 31, 2010. The significant reduction in non-performing loans during 2010 was entirely attributable to payments received from the borrowers.

During the year ended December 31, 2010, the Bank had net loan recoveries of $324,000 compared to net loan charge-offs of $826,000 in the comparable period in 2009. The allowance for loan losses at December 31, 2010 was 3.83% of total loans compared to 3.40% at December 31, 2009.

Capital

Focus Business Bank has capital ratios substantially in excess of regulatory requirements for well capitalized banks. At December 31, 2010, the total risk-based capital ratio was 28.46%.

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.




                                                               12 Month %
BALANCE SHEET          31-Dec-10     30-Sep-10     31-Dec-09     Change
                     ------------  ------------  ------------  -----------
                       Unaudited     Unaudited       Audited

ASSETS
Cash and due from
 banks

  Interest bearing   $ 34,061,000  $ 24,914,000  $ 17,887,000           90%

  Non-interest
   bearing              1,716,000     2,343,000     1,029,000           67%

Federal funds sold        510,000       510,000       510,000            0%

Investment securities  30,289,000    28,169,000    17,819,000           70%

Loans                  66,525,000    68,509,000    71,169,000           -7%

  Allowance for loan
   losses               2,541,000     2,656,000     2,417,000            5%
                     ------------  ------------  ------------

    Net Loans          63,984,000    65,853,000    68,752,000           -7%

Other assets            1,338,000     1,450,000     1,915,000          -30%
                     ------------  ------------  ------------

TOTAL ASSETS         $131,898,000  $123,239,000  $107,912,000           22%
                     ============  ============  ============

LIABILITIES
Deposits

  Non-interest
   bearing           $ 31,982,000  $ 27,506,000  $ 22,080,000           45%

  Interest bearing     77,824,000    72,934,000    64,186,000           21%
                     ------------  ------------  ------------

    Total deposits    109,806,000   100,440,000    86,266,000           27%

Other liabilities         601,000     1,417,000       511,000           18%
                     ------------  ------------  ------------

TOTAL LIABILITIES     110,407,000   101,857,000    86,777,000

Stockholders' equity   21,491,000    21,382,000    21,135,000            2%
                     ------------  ------------  ------------

LIABILITIES AND
 STOCKHOLDERS'
 EQUITY              $131,898,000  $123,239,000  $107,912,000           22%
                     ============  ============  ============
Book value/share     $       7.77  $       7.73  $       7.65            2%

Balance Sheet Ratios
  Loan/deposit                 60%           68%           82%
  Non-interest
   bearing deposits/
   total deposits              29%           27%           26%

Regulatory Capital
 Ratios
  Tier-1 leverage           16.53%        17.24%        19.40%
  Tier-1 risk based
   capital                  27.19%        26.61%        26.18%
  Total risk-based
   capital                  28.46%        27.88%        27.45%

Asset Quality Metrics
  Non-performing
   loans             $     86,000  $     88,000   $ 5,366,000          -98%
  Non-performing
   loans/total loans         0.13%         0.13%         7.54%
  ALLL / total loans         3.83%         3.88%         3.40%


                             Quarter ended               Year ended
INCOME STATEMENT       31-Dec-10     31-Dec-09     31-Dec-10    31-Dec-09
                     ------------  ------------  ------------  -----------
                       Unaudited     Unaudited     Unaudited    Unaudited

Interest income      $  1,090,000  $    953,000  $  4,419,000  $ 3,974,000

Interest expense          120,000       196,000       564,000      922,000
                     ------------  ------------  ------------  -----------

  Net interest income     970,000       757,000     3,855,000    3,052,000

(Reversal of)
 provision for loan
 losses                  (125,000)      275,000      (200,000)   2,245,000

Non-interest income        97,000        51,000       464,000      272,000

Non-interest expense    1,171,000     1,204,000     4,722,000    4,720,000
                     ------------  ------------  ------------  -----------
    Net income (loss)$     21,000  $   (671,000) $   (203,000) $(3,641,000)
                     ============  ============  ============  ===========
Net income (Loss)
 per basic share     $       0.01  $      (0.24) $      (0.07) $     (1.32)


Performance Metrics
  Net interest margin        3.05%         2.83%         3.29%        3.01%
  Return on average
   assets                    0.06%        -2.46%        -0.17%       -3.54%
  Return on average
   equity                    0.38%       -11.94%        -0.95%      -15.70%

Contact Information

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