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 quarter ended March 31, 2015 of
$315,000, compared to $402,000 for the same period last year.
Pre-tax, pre-provision earnings for the quarter ended March 31,
2015 was $711,000, compared to $712,000 for the same period last
year. Included in net income for the quarter ended March 31, 2015
are gains in connection with the sale of securities of $75,000,
compared to $253,000 for the same period last year.
Pre-tax, pre-provision earnings, a non-GAAP financial measure,
is presented because management believes adjusting the Company's
results to exclude taxes and loan loss provisions provides
stockholders with a useful metric for evaluating the 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 pleased to announce our
financial results for the quarter ended March 31, 2015. We finished
this quarter at a new record level of total assets, loans and
deposits. Total assets exceeded $615 million at March 31, 2015,
representing an increase of over 5% during the first three months
of the year, while our loans and deposits grew by over 8% and 6%,
respectively. Additionally, our net interest income improved to
$5.0 million and our net interest margin increased to 3.46%. In
addition, asset quality remains strong with total non-performing
assets to total assets at 10 basis points at the end of the current
quarter."
Jason P. DiNapoli, President and Chief Operating Officer of the
Company, added, "The opening of our new Beverly Hills office
contributed to the strong growth experienced this current quarter.
The economic strength of the Westside of Los Angeles will provide
further opportunities for 1st Century Bank."
2015 1st
Quarter Highlights
- The Bank's total risk-based capital ratio was 12.54% at March
31, 2015, 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 from trust preferred
securities, convertible preferred stock or other equity or debt
instruments.
- For the quarter ended March 31, 2015, the Company recorded net
income of $315,000, or $0.03 per diluted share, compared to
$402,000, or $0.04 per diluted share, for the same period last
year. The decline in net income during the three months ended
March 31, 2015 as compared to the same period last year was
primarily due to a $150,000 increase in provision for loan losses,
a $178,000 decline in gains from the sale of securities, and a
$540,000 increase in non-interest expenses. The increase in
non-interest expense primarily related to increases in salaries and
benefits and occupancy costs. These items were partially
offset by an increase in net interest income of $674,000, primarily
related to a $79.5 million increase in the average balance of loans
during the current quarter as compared to the same period last
year.
- At March 31, 2015 and 2014, the Company's book value per share
was $6.15 and $5.85, respectively, representing an increase of
5.1%.
- Net interest margin was 3.46% for the quarter ended March 31,
2015, compared to 3.25% for the same period last year. The
improvement in our net interest margin was primarily due to an
increase in the average balance of loans relative to total earning
assets as compared to the same period last year. During the
quarter ended March 31, 2015 the average balance of loans relative
to total earning assets was 77.3%, compared to 69.2% for the same
period last year.
- Total core deposits, which include non-interest bearing demand
deposits, interest bearing demand deposits, and money market
deposits and savings, were $493.8 million and $462.4 million at
March 31, 2015 and December 31, 2014,
respectively. Non-interest bearing deposits represent 59.6% of
total deposits at March 31, 2015, compared to 56.1% at December 31,
2014.
- Cost of funds declined to 12 basis points for the quarter ended
March 31, 2015, compared to 16 basis points for the same period
last year.
- Loans increased to $479.9 million at March 31, 2015, compared
to $442.9 million at December 31, 2014. Loan originations were
$61.4 million during the quarter ended March 31, 2015, compared to
$24.3 million during the same period last year.
- Non-performing loans were $632,000, or 0.13% of total loans, at
March 31, 2015, compared to $632,000, or 0.14% of total loans, at
December 31, 2014.
- Non-performing assets as a percentage of total assets were
0.10% and 0.11% at March 31, 2015 and December 31, 2014,
respectively.
- Net loan recoveries were $16,000 during both quarters ended
March 31, 2015 and 2014.
- As of March 31, 2015, the allowance for loan losses ("ALL") was
$7.8 million, or 1.62% of total loans, compared to $7.6 million, or
1.72% of total loans, at December 31, 2014. The ALL to
non-performing loans was 1,229.31% and 1,203.03% at March 31, 2015
and December 31, 2014, respectively.
- Investment securities declined to $73.0 million at March 31,
2015, representing 11.8% of our total assets, compared to $79.7
million, or 13.6% of our total assets, at December 31,
2014. During the quarter ended March 31, 2015, the Company
sold investment securities with an amortized cost of $5.9 million,
recognizing gains of $75,000. During the quarter ended March
31, 2014, the Company sold $14.8 million of investment securities,
recognizing gains of $253,000.
Capital Adequacy
At March 31, 2015, the Company's stockholders' equity totaled
$62.5 million compared to $61.7 million at December 31, 2014. At
March 31, 2015, the Bank's total risk-based capital ratio, tier 1
risk-based capital ratio, common equity tier 1 ratio and tier 1
leverage ratio were 12.54%, 11.29%, 11.29% and 9.77%, respectively,
compared to the requirements of 10.00%, 8.00%, 6.50% and 5.00%,
respectively, to generally be considered a "well capitalized"
financial institution for regulatory purposes.
Balance
Sheet
Total assets at March 31, 2015 were $616.6 million, representing
an increase of $31.4 million, or 5.4%, from $585.2 million at
December 31, 2014. Cash and cash equivalents at March 31, 2015 were
$60.1 million, representing an increase of $1.6 million, or 2.8%,
from $58.5 million at December 31, 2014. Loans increased by
$37.0 million, from $442.9 million at December 31, 2014 to $479.9
million at March 31, 2015. Loan originations were $61.4
million during the quarter ended March 31, 2015, compared to $24.3
million during the same period last year. The majority of loan
originations during the quarter ended March 31, 2015, were related
to commercial real estate loans and construction
lending. Prepayment speeds for the quarter ended March 31,
2015 were 11.0%, compared to 14.3% for the same period last
year. Investment securities were $73.0 million at March 31,
2015, compared to $79.7 million at December 31, 2014, representing
a decline of $6.7 million, or 8.4%. During the quarter ended March
31, 2015, the Company sold investment securities with an amortized
cost of $5.9 million, recognizing gains of $75,000. During the
quarter ended March 31, 2014, the Company sold $14.8 million of
investment securities, recognizing gains of $253,000. The
weighted average life of our investment securities was 3.87 years
and 4.02 years at March 31, 2015 and December 31, 2014,
respectively.
Total liabilities at March 31, 2015 increased by $30.6 million,
or 5.8%, to $554.1 million compared to $523.5 million at December
31, 2014. This increase is primarily due to a $31.1 million
increase in deposits. Total core deposits, which includes
non-interest bearing demand deposits, interest bearing demand
deposits and money market deposits and savings, were $493.8 million
and $462.4 million at March 31, 2015 and December 31, 2014,
respectively, representing an increase of $31.4 million, or
6.8%.
Credit Quality
Allowance and Provision for Loan Losses
The ALL was $7.8 million, or 1.62% of our total loan portfolio,
at March 31, 2015, compared to $7.6 million, or 1.72% of our total
loan portfolio, at December 31, 2014. At both March 31, 2015
and December 31, 2014, our non-performing loans were
$632,000. The ratio of our ALL to non-performing loans was
1,229.31% and 1,203.03% at March 31, 2015 and December 31, 2014,
respectively. In addition, our ratio of non-performing loans
to total loans was 0.13% and 0.14% at March 31, 2015 and December
31, 2014, 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. During the
quarter ended March 31, 2015, we recorded a provision for loan
losses of $150,000, compared to no provision for the same period
last year. The increase in our provision for loan losses
during the quarter ended March 31, 2015 compared to the same period
last year was primarily attributable to the increase in the growth
rate of our loan portfolio during the current quarter. During
the quarter ended March 31, 2015, the Bank's loan portfolio
increased by 8.4%, compared to a decline of 2.0% during the same
period last year.
Criticized and classified loans generally consist of special
mention, substandard and doubtful loans. Special mention,
substandard and doubtful loans were $180,000, $1.3 million and
none, respectively, at March 31, 2015, compared to $3.4 million,
$2.1 million and none, respectively, at March 31, 2014. We had net
recoveries of $16,000 during both the quarters ended March 31, 2015
and 2014. At March 31, 2015, the ALL to total loans was 1.62%
compared to 1.72% at December 31, 2014. The risks associated
with the adequacy of our ALL and the decline in this ratio may have
increased as a result of our loan growth. Management will
continue to closely monitor the adequacy of the ALL and will make
adjustments as warranted. Management believes that the ALL as
of March 31, 2015 and December 31, 2014 was adequate to absorb
probable and inherent risks in the loan portfolio.
Non-Performing Assets
Non-performing assets totaled $632,000 at both March 31, 2015
and December 31, 2014. Non-accrual loans totaled $632,000 at
both March 31, 2015 and December 31, 2014. As a percentage of
total assets, the amount of non-performing assets was 0.10% and
0.11% at March 31, 2015 and December 31, 2014, respectively.
Net Interest Income and Margin
During the quarter ended March 31, 2015, net interest income was
$5.0 million, compared to $4.3 million for the same period last
year. The improvement in net interest income was primarily
attributable to increases in the average balances of our loan
portfolio during the quarter ended March 31, 2015 as compared to
the same period last year, partially offset by a decline in the
average balance of our investment portfolio during the same
period. The average balances of our loan portfolio were $454.7
million during the quarter ended March 31, 2015, compared to $375.2
million for the same period last year. The average balances of
our investment portfolio were $78.6 million during the quarter
ended March 31, 2015, compared to $107.5 million for the same
period last year.
The Company's net interest margin (net interest income divided
by average interest earning assets) was 3.46% for the quarter ended
March 31, 2015, compared to 3.25% for the same period last
year. The 21 basis point increase in net interest margin is
primarily due to an increase in the average balance of loans
relative to total average earning assets as compared to the same
period last year. The percentage of average loans to total
average earning assets increased to 77.3% during the quarter ended
March 31, 2015, compared to 69.2% during the same period last
year.
Non-Interest Income
Non-interest income was $230,000 for the quarter ended March 31,
2015, compared to $365,000 for the same period last year. During
the quarter ended March 31, 2015, the Company sold investment
securities with an amortized cost of $5.9 million, recognizing
gains of $75,000. During the quarter ended March 31, 2014, the
Company sold $14.8 million of investment securities, recognizing
gains of $253,000. With the exception of such gains,
non-interest income primarily consists of customer related fee
income.
Non-Interest Expense
Non-interest expense was $4.5 million for the quarter ended
March 31, 2015, compared to $4.0 million for the same period last
year. The increases in non-interest expense during the quarter
ended March 31, 2015 as compared to the same period last year is
primarily due to the costs incurred to expand the Bank's business
development and related operational support teams, as well as the
supplemental costs associated with the Bank's Beverly Hills
expansion.
Income Tax Provision
During the quarters ended March 31, 2015 and 2014, we recorded
tax provisions of $246,000 and $310,000, respectively.
Net Income
For the quarter ended March 31, 2015, the Company recorded net
income of $315,000, or $0.03 per diluted share, compared to
$402,000, or $0.04 per diluted share, for the same period last
year. Included in net income for the quarters ended March 31,
2015 and 2014, are gains in connection with the sale of securities
of $75,000 and $253,000, respectively.
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 relationship offices in
Santa Monica and Beverly Hills, 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) political instability, (3) changes in the
monetary policies of the U.S. Government, (4) a renewed decline in
economic conditions, (5) renewed deterioration in the value of
California real estate, both residential and commercial, (6) an
increase in the level of non-performing assets and charge-offs, (7)
further increased competition among financial institutions, (8) the
Company's ability to continue to attract interest bearing deposits
and quality loan customers, (9) further government regulation and
the implementation and costs associated with the same, (10)
internal and external fraud and cyber-security threats including
the loss of bank or customer funds, loss of system functionality or
the theft or loss of data, (11) management's ability to
successfully manage the Company's operations, and (12) 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):
|
March, 2015 |
December 31, 2014 |
March, 2014 |
Balance Sheet Results: |
(unaudited) |
|
(unaudited) |
Total Assets |
$ 616,650 |
$ 585,218 |
$ 554,773 |
Total Loans |
$ 479,858 |
$ 442,856 |
$ 376,064 |
Allowance for Loan Losses ("ALL") |
$ 7,765 |
$ 7,599 |
$ 7,252 |
Non-Performing Assets |
$ 632 |
$ 632 |
$ 825 |
Investment Securities-AFS, at estimated
fair value |
$ 72,978 |
$ 79,689 |
$ 102,550 |
Deposits: |
|
|
|
Non-Interest Bearing Demand Deposits |
$ 318,646 |
$ 282,217 |
$ 240,962 |
Interest Bearing Demand Deposits |
24,768 |
25,492 |
21,595 |
Money Market Deposits and Savings |
150,346 |
154,706 |
162,701 |
Certificates of Deposit |
40,536 |
40,757 |
41,847 |
Total Deposits |
$ 534,296 |
$ 503,172 |
$ 467,105 |
Total Stockholders' Equity |
$ 62,549 |
$ 61,693 |
$ 58,337 |
Gross Loans to Deposits |
89.80% |
88.00% |
80.49% |
Ending Book Value per Share |
$ 6.15 |
$ 6.08 |
$ 5.85 |
Common Shares Outstanding |
10,166,441 |
10,140,441 |
9,966,330 |
|
|
|
|
|
Quarters Ended March
31, |
|
Quarterly Operating Results (unaudited): |
2015 |
2014 |
|
Net Interest Income |
$ 5,020 |
$ 4,346 |
|
Provision for Loan Losses |
$ 150 |
$ — |
|
Gain on Sale of AFS Securities |
$ 75 |
$ 253 |
|
Non-Interest Income |
$ 155 |
$ 112 |
|
Non-Interest Expense |
$ 4,539 |
$ 3,999 |
|
Income Tax Provision |
$ 246 |
$ 310 |
|
Net Income |
$ 315 |
$ 402 |
|
Basic Earnings per Share |
$ 0.03 |
$ 0.04 |
|
Basic Shares Outstanding |
9,537,677 |
9,293,251 |
|
Diluted Earnings per Share |
$ 0.03 |
$ 0.04 |
|
Diluted Shares Outstanding |
9,804,333 |
9,710,497 |
|
Quarterly Net Interest Margin* |
3.46% |
3.25% |
|
|
|
|
|
Reconciliation of QTD Net Income to Pre-Tax,
Pre-Provision Earnings: |
|
|
|
Net Income |
$ 315 |
$ 402 |
|
Provision for Loan Losses |
150 |
— |
|
Income Tax Provision |
246 |
310 |
|
Pre-Tax, Pre-Provision Earnings |
$ 711 |
$ 712 |
|
|
|
|
|
|
|
|
|
*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
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