1st Capital Bank Announces: Third Quarter and Year to Date 2015 Financial Results; Record Loans, Deposits, and Equity; Assets Exceed $500 Million
(firmenpresse) - MONTEREY, CA -- (Marketwired) -- 10/30/15 -- (OTC PINK: FISB) reported net income of $405 thousand for the three months ended September 30, 2015, a decrease of 14.6% compared to net income of $470 thousand in the third quarter of 2014 and a decrease of 32.4% compared to income of $601 thousand in the second quarter of 2015, the immediately preceding quarter. Earnings per share were $0.10 (diluted), a decrease of 16% compared to $0.12 (diluted) for the same period a year ago.
Year-to-date earnings were $1.71 million, or $0.42 per share (diluted), for the nine months ended September 30, 2015, an increase of 28.1% compared to $1.33 million, or $0.34 per share (diluted), for the nine months ended September 30, 2014.
Total assets grew $21 million in the third quarter, to $502 million at September 30, 2015, compared to $481 million at June 30, 2015. Net loans increased $39 million during the third quarter, from $342 million at June 30, 2015 to $381 million at September 30, 2014 through a combination of loan pool purchases totaling $28 million and organic growth in the portfolio. Consequently, the Bank increased its allowance for loan losses from $5.5 million at June 30, 2015 to $5.9 million at September 30, 2015 through a provision for credit losses of $365 thousand recognized in third quarter earnings, compared to no provision in the second quarter of 2015. Core deposits increased modestly, by $1 million or 0.4%, during the third quarter of 2015, from $407 million at June 30, 2015 to $408 million at September 30, 2015.
"Strong growth in our loan portfolio positions the Bank for increased net interest income and net interest margin in upcoming quarters," said Thomas E. Meyer, President and Chief Executive Officer. "I am particularly pleased with the performance of our lending team, which funded more than $33 million in new commitments in the third quarter in the course of building our core commercial & industrial and commercial real estate portfolios by more than $15 million."
"In the third quarter, the Bank''s asset mix shifted away from lower yielding cash and investments and into higher yielding real estate and commercial and industrial loans," said Michael J. Winiarski, Chief Financial Officer. "At quarter end, the Bank''s loan-to-deposit ratio was 86.9%, and earning assets totaled $496 million. This positions the Bank well for strong spread income in the fourth quarter."
"We believe we have the strategy and management in place to capitalize on growth opportunities in our primary market areas," said Kurt Gollnick, Chairman of the Board, "This will allow 1st Capital to increase its net interest margin through continued focus on commercial lending opportunities in our core markets."
The Bank''s Board of Directors declared a 5.00% stock dividend on the Bank''s outstanding common stock outstanding, payable on September 30, 2015 to shareholders of record on September 9, 2015. This is the Bank''s third stock dividend, following a 2.00% stock dividend paid in April 2012 and a 5.00% stock dividend paid in June 2014.
Net interest income before provision for credit losses was $3.78 million for the third quarter of 2015, compared to $3.70 million for the second quarter of 2015 and $3.34 million for the third quarter of 2014. These results reflect increases in average earning assets from $438 million in the third quarter of 2014 to $474 million in the second quarter of 2015 and to $480 million in the third quarter of 2015. Net interest margin increased from 3.03% in the third quarter of 2014 to 3.13% in the second quarter of 2015 and declined to 3.12% in the third quarter of 2015.
Loans receivable increased $60 million, or 20.4%, to $387 million at September 30, 2015 from $327 million at December 31, 2014.
Non-performing loans increased from $773 thousand at December 31, 2014 and $92 thousand at June 30, 2015 to $1.9 million at September 30, 2015. Loans over 90 days past due increased $21 thousand, from $0 at December 31, 2014 and June 30, 2015 to $21 thousand at September 30, 2015, all of which was accounted for as non-performing.
The provision for credit losses was $365 thousand in the third quarter of 2015, compared to $250 thousand in the third quarter of 2014 and $0 in the second quarter of 2015.
The allowance for loan losses decreased from 1.63% of gross loans outstanding at December 31, 2014 to 1.53% at September 30, 2015, reflecting the greater proportion of single-family and multi-family residential loans in the portfolio at September 30, 2015.
Investments available for sale decreased $9.7 million in the third quarter, from $98 million at June 30, 2015 to $89 million at September 30, 2015, freeing up funds for additional lending.
Deposits increased $15 million, or 3.7%, to $438 million at September 30, 2015 from $423 million at December 31, 2015.
Non-interest income was $107 thousand for the third quarter of 2015, compared to $112 thousand for the second quarter of 2015 and $182 thousand (including $116 thousand gain on sale of securities) in the third quarter of 2014.
Non-interest expenses for the third quarter of 2015 were $2.84 million, an increase of $13 thousand sequentially from $2.82 million for the second quarter of 2015 and an increase of $387 thousand from $2.46 million recognized in the third quarter of 2014.
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES
Net interest income before provision for credit losses was $3.78 million for the third quarter of 2015, an increase of $80 thousand, or 2.1%, compared to $3.70 million for the second quarter of 2015, and an increase of $436 thousand, or 13.0%, compared to the third quarter of 2014.
Average earning assets were $480 million during the third quarter of 2015, an increase of 1.3% compared to $474 million in the second quarter of 2015. The yield on earning assets was 3.26% in the third quarter, compared to 3.27% in the second quarter. The average balance of the Bank''s loan portfolio was $356 million in the third quarter of 2015, compared to $345 million in the second quarter, and the yield on the loan portfolio was 4.14% and 4.15% in the third and second quarters, respectively. In the third quarter of 2015, the average balance of investments available for sale declined $4.4 million, from $101 million in the second quarter of 2015 to $97 million in the third quarter of 2015. The yield on AFS investments was 0.61% in both the third and second quarters of 2015. The cost of interest-bearing liabilities was 0.24% in both the third and second quarters of 2015, and the average balance of interest-bearing liabilities declined slightly, from $275 million in the second quarter of 2015 to $274 million in the third quarter of 2015.
PROVISION FOR CREDIT LOSSES
The provision for credit losses is a charge against current earnings in an amount determined by management to be necessary to maintain the allowance for loan losses at a level sufficient to absorb probable incurred losses in the loan portfolio in light of losses historically incurred by the Bank and adjusted for qualitative factors associated with the loan portfolio. The provision for losses was $365 thousand in the third quarter of 2015, compared to $0 in the second quarter of 2015 and $250 thousand in the third quarter of 2014. The increase in the provision reflects growth in the total amount of principal outstanding, which increased from $347 million at June 30, 2015 to $387 million at September 30, 2015. It also reflects changes in the mix of loan types within the portfolio and their respective loss histories, as well as management''s assessment of the amounts expected to be realized from certain loans identified as impaired. Impaired loans totaled $9.4 million at September 30, 2015, compared to $9.2 million at June 30, 2015 and $8.6 million at December 31, 2014.
At September 30, 2015, non-performing loans as a percentage of the total loan portfolio were 0.49%, compared to 0.03% at June 30, 2015 and 0.24% at December 31, 2014. At September 30, 2015, the allowance for loan losses was 1.53% of outstanding loans, compared to 1.60% and 1.63% at June 30, 2015 and December 31, 2014, respectively, reflecting the increasing proportion of single-family mortgages in the loan portfolio.
NON-INTEREST INCOME
Non-interest income recognized in the third quarter of 2015 was $107 thousand, a decrease of $5 thousand, or 4.5%, from $112 thousand in the second quarter of 2015, and a decrease of $75 thousand from the third quarter of 2014. Gain on sales of Small Business Administration guaranteed loans declined $13 thousand, from $51 thousand in the second quarter of 2015 to $38 thousand in the third quarter of 2015. In the third quarter of 2014, the Bank recognized gains on sales of available-for-sale securities of $116 thousand; there were no comparable sales in the third quarter of 2015.
NON-INTEREST EXPENSES
Non-interest expenses increased $13 thousand, or 0.5%, to $2.84 million for the third quarter of 2015, compared to $2.82 million for the second quarter of 2015, and increased $377 thousand, or 15.3%, compared to the third quarter of 2014. Salaries and benefits decreased $42 thousand, or 2.4%, from $1.74 million in the second quarter of 2015 to $1.70 million in the third quarter of 2015. Compared to the prior quarter, base salaries increased $45 thousand, while stock-based compensation expense decreased $34 thousand as a result of employee turnover, and capitalized direct loan origination costs increased $73 thousand because of the increase in lending volume. Occupancy costs increased $24 thousand, or 12.4%, from $198 thousand in the second quarter of 2015 to $224 thousand in the third quarter of 2015 as a result of the opening of the Bank''s San Luis Obispo branch.
The efficiency ratio (non-interest expenses divided by the sum of net interest income before provision for loan losses and non-interest income) was 73.0% for the third quarter of 2015, compared to 74.1% for the second quarter of 2015 and 69.8% for the third quarter of 2014. Non-interest expenses as a percent of average total assets were 2.32%, 2.36%, and 2.19% for the third quarter of 2015, the second quarter of 2015, and the third quarter of 2014, respectively.
PROVISION FOR INCOME TAXES
The Bank''s effective book tax rate increased from 39.2% for the second quarter of 2015 to 40.9% for the third quarter of 2015. The second quarter''s provision reflects the Bank''s settlement with the California Franchise Tax Board for certain Enterprise Zone deductions taken in 2009 and 2010.
The Bank''s primary target markets are commercial enterprises, professionals, real estate investors, family business entities, and residents along the Central Coast Region of California. The Bank provides a wide range of credit products, including loans under various government programs such as those provided through the U.S. Small Business Administration ("SBA") and the U.S. Department of Agriculture ("USDA"). A full suite of deposit accounts is also furnished, complemented by robust cash management services. The Bank operates full service branch offices in Monterey, Salinas, King City, and San Luis Obispo. The Bank''s corporate offices are located at 5 Harris Court, Building N, Monterey, California 93940. The Bank''s website is . The main telephone number is 831.264.4000. The primary facsimile number is 831.264.4001.
Member FDIC / Equal Opportunity Lender / SBA Preferred Lender
Certain of the statements contained herein that are not historical facts are "forward-looking statements" within the meaning of and subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may contain words or phrases including, but not limited, to: "believe," "expect," "anticipate," "intend," "estimate," "target," "plans," "may increase," "may fluctuate," "may result in," "are projected," and variations of those words and similar expressions. All such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause such a difference include, among other matters, changes in interest rates; economic conditions including inflation and real estate values in California and the Bank''s market areas; governmental regulation and legislation; credit quality; competition affecting the Bank''s businesses generally; the risk of natural disasters and future catastrophic events including terrorist related incidents and other factors beyond the Bank''s control; and other factors. The Bank does not undertake, and specifically disclaims any obligation, to update or revise any forward-looking statements, whether to reflect new information, future events, or otherwise, except as required by law.
--- financial data follow ---
Thomas E. Meyer
President and Chief Executive Officer
831.264.4057 office
or
Michael J. Winiarski
Chief Financial Officer
831.264.4014 office
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Datum: 30.10.2015 - 15:15 Uhr
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News-ID 1395822
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