1st Century Bancshares, Inc. (the "Company") (Nasdaq:FCTY), the
holding company for 1st Century Bank, N.A. (the "Bank"), today
reported net income for the three and nine months ended September
30, 2012 of $687,000 and $2.0 million, respectively, compared to
$354,000 and $593,000 for the same periods last year. Pre-tax,
pre-provision earnings for the three and nine months ended
September 30, 2012 were $712,000 and $2.1 million, respectively,
compared to $354,000 and $868,000 for the same periods last year.
Pre-tax, pre-provision earnings, a non-GAAP financial measure,
is presented because the Company believes adjusting its results to
exclude taxes and loan loss provisions provides stockholders with a
useful metric for evaluating the core profitability of the Company.
A schedule reconciling our GAAP net income to pre-tax,
pre-provision earnings is provided in the table below.
Alan I. Rothenberg, Chairman of the Board and Chief Executive
Officer of the Company stated, "I'm encouraged by our financial
results for the current period. I believe that our core earnings
reflect the strength of our balance sheet, as well as the continued
progress we are making in connection with resolving our problem
loans. For twelve consecutive quarters, we have experienced a
decline in our percentage of non-performing loans to total loans.
At September 30, 2012, this ratio was 2.6%, and has declined by
over 25% compared to the same period last year. In addition, I
believe we're well positioned and prepared to benefit as quality
loan demand improves. Highlights for the quarter and year-to-date
periods include:
- Growth in total assets from $405 million at December 31, 2011
to $474 million at September 30, 2012;
- Growth in total deposits from $332 million at December 31, 2011
to $397 million at September 30, 2012, while reducing our cost of
deposits to 18 basis points during the current year-to-date
period;
- Continued improvement in our credit quality, with
non-performing assets being reduced to $6.5 million at September
30, 2012, compared to $7.6 million at December 31, 2011;
- Growth in total investments from $130 million at December 31,
2011 to $195 million at September 30, 2012;
- Improved net interest income of $3.4 million and $10.1 million
for the three and nine months ended September 30, 2012,
respectively, compared to $2.8 million and $8.2 million for the
same periods last year, despite a decrease in our net interest
margin; and
- Improved diluted earnings per share, increasing to $0.08 per
share and $0.23 per share during the three and nine months ended
September 30, 2012, respectively, compared to $0.04 per share and
$0.07 per share during the same periods last year."
Jason P. DiNapoli, President and Chief Operating Officer of the
Company stated, "I'm further encouraged by our ability to
consistently grow our core deposit relationships. We believe that
these customer relationships are one of the most meaningful parts
of our franchise value; and we continue to emphasize our service as
a means of differentiating ourselves from competitors within our
market. Deposits have increased by approximately 20% since the
beginning of the year, and our cost of deposits has declined to 16
basis points during the current quarter."
2012 3rd Quarter Highlights
- The Bank's total risk-based capital ratio was 15.68% at
September 30, 2012, compared to the requirement of 10.00% to
generally be considered a "well capitalized" financial institution
for regulatory purposes. The Bank's equity is comprised solely of
common stock, and does not include any capital received in
connection with TARP, or other forms of capital such as trust
preferred securities, convertible preferred stock or other equity
or debt instruments.
- Total assets increased 17.0%, or $69.1 million, to $474.4
million at September 30, 2012, from $405.3 million at December 31,
2011.
- Total core deposits, which include non-interest bearing demand
deposits, interest bearing demand deposits, and money market
deposits and savings, were $350.8 million and $285.6 million at
September 30, 2012 and December 31, 2011, respectively,
representing an increase of $65.1 million, or 22.8%.
- Net interest margin was 2.95% and 3.07% for the three and nine
months ended September 30, 2012, respectively, compared to 3.05%
and 3.27% for the same periods last year.
- Cost of funds were 23 and 25 basis points for the three and
nine months ended September 30, 2012, respectively, compared to 32
and 31 basis points for the same periods last year.
- Investment securities were $194.7 million at September 30,
2012, representing 41.0% of our total assets, compared to $129.9
million, or 32.1% of total assets at December 31, 2011.
- Loans were $241.3 million at September 30, 2012, compared to
$233.0 million at December 31, 2011. Loan originations were $23.7
million and $70.6 million during the three and nine months ended
September 30, 2012, respectively, compared to $18.0 million and
$58.4 million during the same periods last year.
- As of September 30, 2012, the allowance for loan losses ("ALL")
was $4.9 million, or 2.02% of total loans, compared to $5.3
million, or 2.27% of total loans, at December 31, 2011. The ALL to
non-performing loans was 76.76% and 69.47% at September 30, 2012
and December 31, 2011, respectively.
- Non-performing loans to total loans was 2.64% and 3.26% at
September 30, 2012 and December 31, 2011, respectively.
- Non-performing assets as a percentage of total assets declined
to 1.37% at September 30, 2012, compared to 1.88% at December 31,
2011.
- For the three and nine months ended September 30, 2012, the
Company recorded net income of $687,000, or $0.08 per diluted
share, and $2.0 million, or $0.23 per diluted share, respectively.
For the three and nine months ended September 30, 2011, the Company
recorded net income of $354,000, or $0.04 per diluted share, and
$593,000, or $0.07 per diluted share, respectively.
Capital Adequacy
At September 30, 2012, the Company's stockholders' equity
totaled $48.6 million compared to $45.1 million at December 31,
2011. At September 30, 2012, the Bank's total risk-based capital
ratio, tier 1 risk-based capital ratio, and tier 1 leverage ratio
were 15.68%, 14.43%, and 9.49%, respectively, compared to the
requirements of 10.00%, 6.00%, and 5.00%, respectively, to
generally be considered a "well capitalized" financial institution
for regulatory purposes.
Balance Sheet
Total assets at September 30, 2012 were $474.4 million,
representing an increase of approximately $69.1 million, or 17.0%,
from $405.3 million at December 31, 2011. The increase in total
assets is primarily attributable to growth in our deposit
portfolio. Cash and cash equivalents at September 30, 2012
were $36.5 million, representing a decrease of $5.4 million, or
12.9%, from $41.9 million at December 31, 2011. Investment
securities were $194.7 million at September 30, 2012, compared to
$129.9 million at December 31, 2011, representing an increase of
$64.8 million, or 49.8%. The increase in our investment
portfolio is primarily attributable to the purchase of agency
mortgage-backed securities and corporate notes of $62.3 million and
$28.4 million, respectively, during the nine months ended September
30, 2012. The average life of our investment securities was
3.14 years and 3.50 years at September 30, 2012 and December 31,
2011, respectively. Loans were $241.3 million and $233.0
million at September 30, 2012 and December 31, 2011,
respectively. The nominal growth within our loan portfolio is
primarily being caused by a lack of quality loan demand, as well as
elevated prepayment speeds during the current year. Prepayment
speeds for the three and nine months ended September 30, 2012 were
19.4% and 21.9%, respectively, compared to 38.1% and 12.3% for the
same periods last year.
Total liabilities at September 30, 2012 increased by $65.6
million, or 18.2%, to $425.8 million, compared to $360.2 million at
December 31, 2011. This increase is primarily due to growth
within our non-interest bearing deposits of $47.7 million, and is
primarily due to our continued core deposit gathering
efforts. Total core deposits, which include non-interest
bearing demand deposits, interest bearing demand deposits and money
market deposits and savings, were $350.8 million and $285.6 million
at September 30, 2012 and December 31, 2011, respectively,
representing an increase of $65.1 million, or 22.8%.
Credit Quality
Allowance and Provision for Loan Losses
The ALL was $4.9 million, or 2.02% of our total loan portfolio,
at September 30, 2012, compared to $5.3 million, or 2.27%, at
December 31, 2011. At September 30, 2012 and December 31,
2011, our non-performing loans were $6.4 million and $7.6 million,
respectively. The ratio of our ALL to non-performing loans was
76.76% and 69.47% at September 30, 2012 and December 31, 2011,
respectively. In addition, our ratio of non-performing loans
to total loans was 2.64% and 3.26% at September 30, 2012 and
December 31, 2011, respectively.
The ALL is impacted by inherent risk in the loan portfolio,
including the level of our non-performing loans, as well as
specific reserves and charge-off activities. There was no
provision for loan losses for the three and nine months ended
September 30, 2012. There was no provision for loan losses for
the three months ended September 30, 2011 and a $275,000 provision
for loan losses for the nine months ended September 30, 2011.
The decline in provision for loan losses recorded during the
nine months ended September 30, 2012, compared to the same period
last year, is primarily due to the improvement in the level of our
criticized and classified loans, which generally consist of special
mention, substandard and doubtful loans. Special mention,
substandard and doubtful loans were $888,000, $8.1 million and
none, respectively, at September 30, 2012, compared to $6.8
million, $10.4 million, and $900,000, respectively, at September
30, 2011. We had net recoveries of $15,000 and $162,000 during
the three months ended September 30, 2012 and 2011, respectively,
and net charge-offs of $403,000 and $312,000 during the nine months
ended September 30, 2012 and 2011, respectively. Management
believes that the ALL as of September 30, 2012 and December 31,
2011 was adequate to absorb known and inherent risks in the loan
portfolio.
Non-Performing Assets
Non-performing assets totaled $6.5 million and $7.6 million at
September 30, 2012 and December 31, 2011,
respectively. Non-accrual loans totaled $6.4 million and $7.6
million at September 30, 2012 and December 31, 2011,
respectively. At September 30, 2012, non-accrual loans
consisted of three commercial loans totaling $1.8 million, one
commercial real estate loan totaling $3.1 million, one commercial
land loan totaling $1.1 million and one consumer related loan
totaling $345,000. At December 31, 2011, non-accrual loans
consisted of four commercial loans totaling $2.2 million, two
commercial real estate loans totaling $3.8 million, one commercial
land loan totaling $1.3 million and one consumer related loan
totaling $345,000. At September 30, 2012, other real estate
owned ("OREO") consisted of one commercial real estate property
totaling $50,000 and one undeveloped land property totaling
$90,000. There was no OREO outstanding at December 31,
2011. As a percentage of total assets, the amount of
non-performing assets was 1.37% and 1.88% at September 30, 2012 and
December 31, 2011, respectively.
Net Interest Income and Margin
During the three and nine months ended September 30, 2012, net
interest income was $3.4 million and $10.1 million, respectively,
compared to $2.8 million and $8.2 million for the same periods last
year. These increases were primarily attributable to
additional interest earned in connection with our loan and
investment portfolios as compared to the same periods last year,
and were the result of increases in the average balances of these
portfolios during the current periods, partially offset by a
decline in yields earned.
The Company's net interest margin (net interest income divided
by average interest earning assets) was 2.95% for the three months
ended September 30, 2012, compared to 3.05% for the same period
last year. This 10 basis point decline in net interest margin
is primarily due to a decrease in the yield on earning assets,
partially offset by a decline in the cost of interest bearing
deposits and borrowings. The decrease in yield on earning
assets is primarily attributable to a decline in interest rates
earned on these assets during the three months ended September 30,
2012, as compared to the same period last year, and was caused by a
general decline in interest rates, as well as competitive loan
pricing conditions in our market, which have continued to compress
loan yields. During the three months ended September 30, 2012
as compared to the same period last year, the decline in our cost
of interest bearing deposits and borrowings is primarily
attributable to a decrease in interest rates paid on these
accounts. The average cost of interest bearing deposits and
borrowings was 0.38% during the three months ended September 30,
2012 compared to 0.49% for the same period last year.
The Company's net interest margin was 3.07% for the nine months
ended September 30, 2012, compared to 3.27% for the same period
last year. This 20 basis point decline in net interest margin
is primarily due to a decrease in the yield on earning assets,
partially offset by a decline in the cost of interest bearing
deposits and borrowings. As discussed above, the decrease in
yield on earning assets is primarily attributable to a decline in
interest rates earned on these assets during the nine months ended
September 30, 2012, as compared to the same period last year, and
was caused by a general decline in interest rates, as well as
competitive loan pricing conditions in our market, which have
continued to compress loan yields. In addition, the decline in
our cost of interest bearing deposits and borrowings is primarily
attributable to a decrease in interest rates paid on these
accounts. The average cost of interest bearing deposits and
borrowings was 0.39% during the nine months ended September 30,
2012 compared to 0.48% for the same period last year.
Non-Interest Income
Non-interest income was $424,000 and $1.3 million for the three
and nine months ended September 30, 2012, respectively, compared to
$222,000 and $618,000 for the same periods last year. The
increase in non-interest income during the three months ended
September 30, 2012, compared to the same period last year is
primarily attributable to an increase in loan arrangement fees
earned in connection with our college loan funding
program. The increase during the nine months ended September
30, 2012, compared to the same period last year was due to the loan
arrangement fees discussed above, as well as, other income
recognized on interest rate swap transactions entered into during
the nine months ended September 30, 2012.
Non-Interest Expense
Non-interest expense was $3.1 million and $9.3 million for the
three and nine months ended September 30, 2012, respectively,
compared to $2.7 million and $8.0 million for the same periods last
year. The increase in non-interest expense during the three
months ended September 30, 2012, is primarily due to the additional
costs incurred related to expanding the Bank's business development
team and increased costs associated with our college loan funding
program. During the nine months ended September 30, 2012, this
increase was primarily due to the factors discussed above, as well
as expenses incurred related to interest rate swaps, as well as the
opening of our Santa Monica relationship office in the middle of
2011.
Income Tax Provision
During the three and nine months ended September 30, 2012, we
recorded a tax expense of approximately $25,000 and $60,000,
respectively. The Company does not anticipate owing any
substantial taxes for Federal or State purposes until the Company's
net operating losses are fully utilized. During the three and
nine months ended September 30, 2011, we did not record an income
tax provision.
Net Income
For the three and nine months ended September 30, 2012, the
Company recorded net income of $687,000, or $0.08 per diluted
share, and $2.0 million, or $0.23 per diluted share, respectively,
compared to $354,000, or $0.04 per diluted share, and $593,000, or
$0.07 per diluted share, for the same periods last year.
About 1st Century Bancshares, Inc.
1st Century Bancshares, Inc. is a publicly owned company traded
on the NASDAQ Capital Market under the symbol "FCTY." The
Company's wholly-owned subsidiary, 1st Century Bank, N.A., is
headquartered in the Century City area of Los Angeles, with a full
service business bank in Century City, CA, and a relationship
office in Santa Monica, CA. The Bank's primary focus is
serving the specific banking needs of entrepreneurs, professionals
and small businesses with the personal service of a traditional
community bank, while offering the technologies of a big money
center bank. The Company maintains a website at
www.1cbank.com. By including the foregoing website address link,
the Company does not intend to and shall not be deemed to
incorporate by reference any material contained therein.
Safe Harbor
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You can find many (but
not all) of these forward-looking statements by looking for words
such as "approximates," "believes," "expects," "anticipates,"
"estimates," "intends," "plans," "would," "may" or other similar
expressions in this press release. These statements are based upon
our management's current expectations and speak only as of the date
hereof. Forward-looking statements are subject to certain
risks and uncertainties that could cause our actual results,
performance or achievements to differ materially and adversely from
those expressed, suggested or implied herein. Accordingly,
investors should use caution in relying on forward-looking
statements to anticipate future results or trends. These risks
and uncertainties include, but are not limited to: (1) the impact
of changes in interest rates, (2) a renewed decline in economic
conditions, (3) further increased competition among financial
institutions, (4) the Company's ability to continue to attract
interest bearing deposits and quality loan customers, (5) further
government regulation and the implementation and costs associated
with the same, (6) management's ability to successfully manage the
Company's operations, and (7) the other risks set forth in the
Company's reports filed with the U.S. Securities and Exchange
Commission. The Company does not undertake, and specifically
disclaims, any obligation to revise or update any forward-looking
statements for any reason.
(Tables follow)
SUMMARY FINANCIAL INFORMATION
The following tables present relevant financial data from the
Company's recent performance (dollars in thousands, except per
share data):
|
September 30, 2012 |
December 31, 2011 |
September 30, 2011 |
Balance Sheet Results: |
(unaudited) |
|
(unaudited) |
Total Assets |
$474,363 |
$405,274 |
$384,375 |
Total Loans |
$241,320 |
$233,005 |
$184,817 |
Allowance for Loan Losses
("ALL") |
$4,881 |
$5,284 |
$5,246 |
Non-Performing Assets |
$6,499 |
$7,606 |
$7,170 |
Investment Securities-AFS, at
estimated fair value |
$194,659 |
$129,906 |
$103,298 |
Deposits: |
|
|
|
Non-Interest Bearing Demand
Deposits |
$170,568 |
$122,843 |
$120,895 |
Interest Bearing Demand
Deposits |
$28,014 |
$20,739 |
$24,770 |
Money Market Deposits and
Savings |
$152,185 |
$142,061 |
$133,349 |
Certificates of Deposit |
$46,115 |
$46,811 |
$46,893 |
Total Deposits |
$396,882 |
$332,454 |
$325,907 |
Total Stockholders' Equity |
$48,565 |
$45,051 |
$45,331 |
Gross Loans to Deposits |
60.79% |
70.08% |
56.71% |
Ending Book Value per
Share |
$5.33 |
$4.97 |
$4.99 |
|
|
|
|
|
Three Months Ended
September 30, |
|
Quarterly Operating Results (unaudited): |
2012 |
2011 |
|
Net Interest Income |
$3,426 |
$2,815 |
|
Provision for Loan Losses |
-- |
-- |
|
Non-Interest Income |
$424 |
$222 |
|
Non-Interest Expense |
$3,138 |
$2,683 |
|
Income Tax Provision |
$25 |
-- |
|
Net Income |
$687 |
$354 |
|
Basic Earnings per Share |
$0.08 |
$0.04 |
|
Diluted Earnings per Share |
$0.08 |
$0.04 |
|
Quarterly Net Interest
Margin* |
2.95% |
3.05% |
|
|
|
|
|
Reconciliation of QTD
Net Income to Pre-Tax, Pre-Provision Earnings: |
|
|
Net Income |
$687 |
$354 |
|
Provision for Loan Losses |
-- |
-- |
|
Income Tax Provision |
25 |
-- |
|
Pre-Tax, Pre-Provision
Earnings |
$712 |
$354 |
|
|
|
|
|
|
Nine Months Ended
September 30, |
|
YTD Operating Results (unaudited): |
2012 |
2011 |
|
Net Interest Income |
$10,108 |
$8,245 |
|
Provision for Loan Losses |
-- |
$275 |
|
Non-Interest Income |
$1,260 |
$618 |
|
Non-Interest Expense |
$9,278 |
$7,995 |
|
Income Tax Provision |
$60 |
-- |
|
Net Income |
$2,030 |
$593 |
|
Basic Earnings per Share |
$0.24 |
$0.07 |
|
Diluted Earnings per Share |
$0.23 |
$0.07 |
|
YTD Net Interest Margin* |
3.07% |
3.27% |
|
|
|
|
|
Reconciliation of YTD
Net Income to Pre-Tax, Pre-Provision Earnings: |
|
|
Net Income |
$2,030 |
$593 |
|
Provision for Loan Losses |
-- |
275 |
|
Income Tax Provision |
60 |
-- |
|
Pre-Tax, Pre-Provision
Earnings |
$2,090 |
$868 |
|
|
|
|
|
*Percentages are reported on an
annualized basis. |
CONTACT: Alan I. Rothenberg
Chairman/Chief Executive Officer
Phone: (310) 270-9501
Jason P. DiNapoli
President/Chief Operating Officer
Phone: (310) 270-9505
1ST Century Bancshares, (NASDAQ:FCTY)
Historical Stock Chart
From Jul 2024 to Jul 2024
1ST Century Bancshares, (NASDAQ:FCTY)
Historical Stock Chart
From Jul 2023 to Jul 2024