SOURCE: Focus Business Bank

Focus Business Bank

July 24, 2012 20:06 ET

Focus Business Bank Announces Unaudited Financial Results for the Quarter and Six-Months Ended June 30, 2012

SAN JOSE, CA--(Marketwire - Jul 24, 2012) - Focus Business Bank (OTCBB: FCSB) announced unaudited financial results for the quarter and six-months ended June 30, 2012. Net income of $264,000, $0.10 per share, and $507,000, $0.18 per share, for the quarter and six-months ended June 30, 2012 respectively were both records and continued the Bank's string of nine consecutive quarters of profitability. President and Chief Executive Officer Richard L. Conniff commented, "We are very pleased that the Bank continues to experience growth in core earnings. This earnings growth is primarily driven by steady increases in loans outstanding coupled with effective control of expenses. Our team is proud of the substantial loan growth we have achieved and we have great confidence in our credit quality."

Assets and Liabilities
Total assets were $167.7 million at June 30, 2012, growing 17% from June 30, 2011. Total loans at June 30, 2012 were $112.5 million, a 29% increase from June 30, 2011. Total deposits of $143.7 million at June 30, 2012 represented a 19% increase from June 30, 2011. The loan to deposit ratio was 78% at June 30, 2012 compared to 72% at June 30, 2011.

The growth in loans and deposits is primarily the result of the Bank's marketing efforts targeting closely-held businesses in Santa Clara County. Over the past year, the Bank has increased its market share of non-profit corporations and condominium homeowner associations, both specialties of the Bank, which contributed significantly to the growth in deposits. 

Net Interest Income
Net interest income for the three and six-months ended June 30, 2012 was up 25% and 38%, respectively, compared to the same periods ending June 30, 2011. The net interest margin was 3.84% and 3.81% for the three and six-months ended June 30, 2012, respectively. The net interest margin for the three and six-months ended June 30, 2012 is higher compared to the same periods in 2011, primarily because loans, the highest yielding category of earning assets, represent a larger percentage of total earning assets. 

Non-interest Income
Non-interest income was $250,000 and $451,000, respectively, for the quarter and six months ended June 30, 2012, compared to $233,000 and $772,000, respectively, for the same periods in 2011. For the Bank, the largest component of non-interest income is gains on the sale of SBA loans originated by the Bank and sold in the secondary market. Gains on the sale of SBA loans were $107,000 and $233,000 for the quarter and six-months ended June 30, 2012, respectively, compared to $179,000 and $638,000, respectively for the same periods ending June 30, 2011. The balance of non-interest income is primarily related to loan servicing fees, deposit activities and changes in the cash surrender value of bank owned life insurance.

Non-Interest Expense
Non-interest expense was $1,435,000 and $2,795,000 for the quarter and six-months ended June 30, 2012, respectively, compared to $1,265,000 and $2,738,000, respectively, for the comparable periods in 2011. The largest component of non-interest expense is related to compensation of the Bank's employees. The Bank had 26 full-time employees at June 30, 2012 compared to 22 full-time employees at June 30, 2011.

Asset Quality
The Bank made no provision for loan losses in the quarter or six-month periods ended June 30, 2012 and June 30, 2011. The allowance for loan losses was 2.26% of total loans at June 30, 2012, as compared to 2.91% at June 30, 2011. There were no loan charge-offs or recoveries for the quarter or six-months ended June 30, 2012. At June 30, 2012, the Bank had no non-performing or loans past due more than 30 days. The Bank has never had other real estate owned.

Capital
Focus Business Bank has capital ratios substantially in excess of the minimum regulatory requirements for a bank to be considered well capitalized. At June 30, 2012, the total risk-based capital ratio was 18.59%.

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 is also an SBA Preferred Lender. 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 Information
Unaudited
       
             
    As of        
BALANCE SHEET   30-Jun-12     31-Dec-11     30-Jun-11     12 Month % Change  
($ in '000 except share data)                              
ASSETS                              
Cash and due from banks                              
  Interest bearing   $ 22,454     $ 40,906     $ 21,957     2 %
  Non-interest bearing     5,850       4,309       3,008     94 %
Federal funds sold     505       505       505     0 %
Investment securities     24,345       26,502       31,502     -23 %
Loans     112,554       97,401       87,267     29 %
  Net deferred loan costs     9       37       93     -90 %
  Allowance for loan losses     (2,541 )     (2,541 )     (2,541 )   0 %
    Net Loans     110,022       94,897       84,819     30 %
Other assets     4,570       1,405       1,548     195 %
                               
TOTAL ASSETS   $ 167,746     $ 168,524     $ 143,339     17 %
                               
LIABILITIES                              
Deposits                              
  Non-interest bearing   $ 47,466     $ 63,196     $ 47,734     -1 %
  Interest bearing     96,216       81,986       72,641     32 %
      Total deposits     143,682       145,182       120,375     19 %
Other liabilities     808       716       886     -9 %
TOTAL LIABILITIES     144,490       145,898       121,261     19 %
Stockholders' equity     23,256       22,626       22,078     5 %
                               
LIABILITIES AND STOCKHOLDERS' EQUITY   $ 167,746     $ 168,524     $ 143,339     17 %
Book value/share   $ 8.35     $ 8.15     $ 7.98     5 %
                               
Balance Sheet Ratios                              
  Loans/deposits     78 %     67 %     72 %      
  Non-interest bearing/total deposit     33 %     44 %     40 %      
                                 
Regulatory Capital Ratios                              
  Tier-1 leverage     13.84 %     13.82 %     16.13 %      
  Tier-1 risk based capital     17.33 %     19.48 %     20.56 %      
  Total risk-based capital     18.59 %     20.75 %     21.83 %      
                                 
Asset Quality Metrics                              
  Non-performing loans   $ -     $ 1,044     $ 83        
  Non-performing loans/total loans     0.00 %     1.07 %     0.10 %      
  ALLL/total loans     2.26 %     2.91 %     2.61 %      
                               
       
       
    Focus Business Bank
Summary Financial Information
Unaudited
 
       
    Quarters Ended     Six-Months Ended  
INCOME STATEMENT   30-Jun-12     30-Jun-11     30-Jun-12     30-Jun-11  
($ in '000 except share data)                                
Interest income   $ 1,600     $ 1,249     $ 3,127     $ 2,359  
Interest expense     106       106       201       231  
  Net interest income     1,494       1,143       2,926       2,128  
Provision for loan losses     -       -       -       -  
Non-interest income     250       233       451       772  
Non-interest expense     1,435       1,265       2,795       2,738  
    Pre-tax income     309       111       582       162  
    Income taxes     45       -       75       -  
Net income   $ 264     $ 111     $ 507     $ 162  
Net income per basic share   $ 0.10     $ 0.04     $ 0.18     $ 0.06  
                                 
Performance Metrics                                
  Net interest margin     3.84 %     3.52 %     3.81 %     3.28 %
  Return on average assets     0.65 %     0.34 %     0.63 %     0.25 %
  Return on average equity     4.58 %     2.03 %     4.43 %     1.50 %
                                 

Contact Information

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