SOURCE: Focus Business Bank

Focus Business Bank

July 26, 2011 20:41 ET

Focus Business Bank Announces Unaudited Financial Results for the Quarter June 30, 2011 and Six Months Ended June 30, 2011

SAN JOSE, CA--(Marketwire - Jul 26, 2011) - Focus Business Bank (OTCBB: FCSB) announced unaudited financial results for the quarter and six-months ended June 30, 2011. The Bank reported net income of $111,000, or $0.04 per share, for the quarter ended June 30, 2011 compared to net income of $32,000, or $0.01 per share, for the quarter ended June 30, 2010. For the six-months ended June 30, 2011, the Bank reported net income of $161,000, or $0.06 per share, compared to a loss of $275,000, or ($0.10) per share, for the six-months ended June 30, 2010.

President and Chief Executive Officer Richard L. Conniff stated, "The Bank is pleased with the continued improvement in earnings. June 30, 2011, marks the fifth consecutive quarter of positive net income. Results for the quarter and six-months ended June 30, 2011 both represent record earnings. The positive trend in earnings validates our commitment to serving closely-held businesses in Santa Clara County."

Assets and Liabilities
Total assets increased to $143,338,000 at June 30, 2011, a 9% increase from December 31, 2010 and 17% from June 30, 2010. Total deposits grew to $120,375,000 at June 30, 2011, a 10% increase from December 31, 2010 and 19% from June 30, 2010. Total loans were $84,819,000 at June 30, 2011, a 33% increase from December 31, 2010 and 22% from June 30, 2010. Total assets, loans and deposits at June 30, 2011 represent record high levels since the Bank's opening in January 2007. Although the Bank has experienced significant growth in loans, it maintains strong balance sheet liquidity with $56,674,000 in cash, overnight funds and investment securities at June 30, 2011 compared to $66,281,000 at December 31, 2010 and $51,232,000 at June 30, 2010.

Non-interest bearing deposits at June 30, 2011 were $47,734,000 as compared to $31,982,000 at December 31, 2010 and $29,007,000 at June 30, 2010. As a result of the 65% growth from June 30, 2010 to June 30, 2011, non-interest bearing deposits represent 40% of total deposits at June 30, 2011, compared to 29% of total deposits at June 30, 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 and six-months ended June 30, 2011 was $1,143,000 and $2,128,000, respectively, compared to $921,000 and $1,876,000 for the same periods in 2010. The net interest margin (net interest income divided by average earning assets) for the quarter and six-months ended June 30, 2011 was 3.52% and 3.28%, respectively, compared to 3.26% and 3.41% for the quarter and six-months ended June 30, 2010. The increase in net interest margin for the quarter ending June 30, 2011 reflects an increase in the loan to deposit ratio as a higher percentage of the Bank's earning assets are in loans. At June 30, 2011, the loan to deposit ratio was 72% as compared to 60% at December 31, 2010 and 71% at June 30, 2010.

Non-interest Income
Non-interest income was $233,000 and $772,000 for the quarter and six months ended June 30, 2011, respectively, compared to $280,000 and $318,000 for the same periods in 2010. The increase in non-interest income for the six months ending June 30, 2011 is primarily attributable to gains on the sale of SBA loans, much of which occurred in the first quarter of 2011 when SBA volumes increased due to incentives offered by the SBA to stimulate lending. While those incentives have now expired, any resulting change in the volume of SBA lending is not expected to have a material impact on the Bank's future earnings. Focus Business Bank is an SBA preferred lender.

Non-Interest Expense
Non-interest expense was $1,265,000 and $2,739,000 for the quarter and six-months ended June 30, 2011, respectively, compared to $1,169,000 and $2,394,000 for the quarter and six months ended June 30, 2010. The increase in non-interest expense for the periods ending June 30, 2011 compared to the same periods in 2010 is primarily attributable to personnel and related expenses associated with the growth in earning assets and the generation of non-interest income including the gain on sale of SBA loans.

Asset Quality
The Bank made no provision to loan loss reserves in the quarter and six-months ended June 30, 2011 as compared to no provision in the quarter ending June 30, 2010 and $75,000 in the six months ended June 30, 2010. The allowance for loan and lease losses was 2.91% of total loans at June 30, 2011 as compared to 3.83% at December 31, 2010 and 3.40% at June 30, 2010. There were no loan charge-offs or recoveries in the quarter and six-months ending June 30, 2011. Non-performing loans at June 30, 2011 were $83,000, or 0.10% of total loans, compared to $86,000, or 0.13% of total loans, at December 31, 2010 and $552,000, or 0.77% of total loans, at June 30, 2010.

Capital
Focus Business Bank has capital ratios substantially in excess of regulatory requirements for well capitalized banks. At June 30, 2011, the total risk-based capital ratio was 21.83%.

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
(in, 000's except per share data)
(Unaudited) As of
BALANCE SHEET 30-Jun-11 31-Dec-10 30-Jun-10 12 Month % Change
ASSETS
Cash and due from banks
Interest bearing $ 21,957 $ 34,061 $ 21,747 1 %
Non-interest bearing 3,008 1,716 2,483 21 %
Federal funds sold 505 510 510 -1 %
Investment securities 31,204 29,994 26,492 18 %
Loans 87,267 66,387 71,554 22 %
Net deferred loan costs 93 138 120 -23 %
Allowance for loan losses (2,541 ) (2,541 ) (2,432 ) 4 %
Net Loans 84,819 63,984 69,242 22 %
Other assets 1,845 1,633 2,358 -25 %
TOTAL ASSETS $ 143,338 $ 131,898 $ 122,832 17 %
LIABILITIES
Deposits
Non-interest bearing $ 47,734 $ 31,982 $ 29,007 65 %
Interest bearing 72,641 77,824 71,930 1 %
Total deposits 120,375 109,806 100,937 19 %
Other liabilities 886 601 647 37 %
TOTAL LIABILITIES 121,261 110,407 101,584
Stockholders' equity 22,077 21,491 21,248 4 %
LIABILITIES AND STOCKHOLDERS' EQUITY $ 143,338 $ 131,898 $ 122,832 17 %
Book value/share $ 7.98 $ 7.77 $ 7.68 4 %
Balance Sheet Ratios
Loan/deposit 72 % 60 % 71 %
Non-interest/total deposit 40 % 29 % 29 %
Regulatory Capital Ratios
Tier-1 leverage 16.13 % 16.53 % 18.11 %
Tier-1 risk based capital 20.56 % 27.19 % 25.02 %
Total risk-based capital 21.83 % 28.46 % 26.30 %
Asset Quality Metrics
Non-performing loans $ 83 $ 86 $ 552 -85 %
Non-performing loans/total loans 0.10 % 0.13 % 0.77 %
ALLL/total loans 2.91 % 3.83 % 3.40 %

Summary Financial Statements (cont.)
(Unaudited) Three Months Ended Six Months Ended
INCOME STATEMENT 30-Jun-11 30-Jun-10 30-Jun-11 30-Jun-10
Interest income $ 1,249 $ 1,059 $ 2,359 $ 2,186
Interest expense 106 138 231 310
Net interest income 1,143 921 2,128 1,876
Provision for loan losses - - - 75
Non-interest income 233 280 772 318
Non-interest expense 1,265 1,169 2,739 2,394
Net income (loss) $ 111 $ 32 $ 161 $ (275 )
Net income (Loss) per basic share $ 0.04 $ 0.01 $ 0.06 $ (0.10 )
Performance Metrics
Net interest margin 3.52 % 3.26 % 3.28 % 3.41 %
Return on average assets 0.34 % 0.11 % 0.25 % -0.49 %
Return on average equity 2.03 % 0.60 % 1.50 % -2.62 %

Contact Information

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