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 and year ended December 31,
2015 of $869,000 and $2.6 million, respectively, compared to
$554,000 and $2.4 million for the same periods last year.
Diluted earnings per share for the quarter and year ended
December 31, 2015 were $0.09 and $0.26, respectively, compared to
$0.06 and $0.24 for the same periods last year. Pre-tax,
pre-provision earnings for the quarter and year ended December 31,
2015 was $1.8 million and $5.8 million, respectively, compared to
$1.1 million and $4.4 million for the same periods last year.
Included in net income for the quarter and year ended December 31,
2015 are gains in connection with the sale of securities of none
and $75,000, respectively, compared to $196,000 and $1.2 million
for the same periods last year, as well as provisions for loan
losses of $300,000 and $1.3 million for the quarter and year ended
December 31, 2015, compared to none and $100,000 for the same
periods 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 of Directors and Chief
Executive Officer of the Company, stated, "I'm proud to announce
our financial results for the quarter and year ended December 31,
2015. Since the beginning of 2015, we've experienced
significant growth in both loans and deposits. As of December
31, 2015, loans and deposits have both increased to approximately
$598 million, representing growth rates of approximately 35% and
19%, respectively, during the current year. Profitability
trends also continue to improve, including a 24% increase in net
interest income during the year compared to the prior year and an
efficiency ratio of 76%. In addition, asset quality remains
strong with total non-performing assets to total assets at 10 basis
points at December 31, 2015."
Jason P. DiNapoli, President and Chief Operating Officer of the
Company, added, "Our core West Los Angeles market is experiencing
strong economic activity, which is translating into significant
increases in both loans and core deposits. Through consistent
execution of our growth strategies and deeper penetration of the
West Los Angeles market, we are generating a high volume of quality
lending opportunities. During the fourth quarter of 2015, our
total loans increased at an annualized rate of approximately 36%,
which bodes well for the future."
2015
4th Quarter and Full
Year Highlights
- For the quarter and year ended December 31, 2015, the Company
recorded net income of $869,000, or $0.09 per diluted share, and
$2.6 million, or $0.26 per diluted share, respectively.
During the same periods last year, the Company reported net income
of $554,000, or $0.06 per diluted share, and $2.4 million, or $0.24
per diluted share, respectively. The increase in net income
during the three months ended December 31, 2015 as compared to the
same period last year was primarily due to an increase in net
interest income of $1.3 million, resulting from an increase in the
average balance of loans during the current quarter as compared to
the same period last year. This increase was partially offset
by a $300,000 increase in provision for loan losses, a $403,000
increase in non-interest expenses and a $196,000 decline in gains
from the sale of securities. Consistent with the discussion
above, the increase in net income during the year ended December
31, 2015 as compared to the same period last year was primarily due
to an increase in net interest income of $4.5 million, resulting
from an increase in the average balance of loans during the current
year as compared to the same period last year. This increase
was partially offset by a $1.2 million increase in provision for
loan losses, a $2.0 million increase in non-interest expenses and a
$1.1 million decline in gains from the sale of securities.
- At December 31, 2015 and 2014, the Company's book value per
share was $6.29 and $6.08, respectively, representing an increase
of 3.5%.
- Net interest margin was 3.47% and 3.50% for the quarter and
year ended December 31, 2015, compared to 3.26% and 3.28% for the
same periods 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
periods last year. During the quarter and year ended December
31, 2015, the average balance of loans relative to total earning
assets was 78.8% and 78.5%, respectively, compared to 71.5% and
71.7% for the same periods last year.
- Total core deposits, which include non-interest bearing demand
deposits, interest bearing demand deposits, and money market
deposits and savings, were $550.4 million, $462.4 million and
$590.1 million at December 31, 2015, December 31, 2014 and
September 30, 2015, respectively. Non-interest bearing
deposits represent 60.6% of total deposits at December 31, 2015,
compared to 56.1% at December 31, 2014, and 60.6% at September 30,
2015.
- Cost of funds declined to 11 basis points and 12 basis points
for the quarter and year ended December 31, 2015, respectively,
compared to 14 basis points and 15 basis points for the same
periods last year.
- Other borrowings increased by $50.0 million and $47.5 million
during the quarter and year ended December 31, 2015, respectively,
compared to the same periods last year. The increase in other
borrowings was primarily due to a $50.0 million overnight borrowing
under our credit facility with the Federal Home Loan Bank of San
Francisco (the "FHLB") at December 31, 2015. This overnight
borrowing was repaid in January 2016.
- Loans increased to $598.4 million at December 31, 2015,
compared to $442.9 million at December 31, 2014 and $549.1 million
at September 30, 2015. Loan originations were $69.6 million
and $291.7 million during the quarter and year ended December 31,
2015, respectively, compared to $55.5 million and $226.3 million
during the same periods last year.
- Non-performing loans were $712,000, or 0.12% of total loans, at
December 31, 2015, compared to $632,000, or 0.14%, at December 31,
2014 and $712,000, or 0.13%, at September 30, 2015.
- Non-performing assets as a percentage of total assets were
0.10%, 0.11% and 0.10% at December 31, 2015, December 31, 2014 and
September 30, 2015, respectively.
- Net loan recoveries were $22,000 and $37,000 during the quarter
and year ended December 31, 2015, respectively, compared to net
loan recoveries of $22,000 and $263,000 during the same periods
last year.
- As of December 31, 2015, the allowance for loan losses ("ALL")
was $9.0 million, or 1.50% of total loans, compared to $7.6
million, or 1.72% of total loans, at December 31, 2014 and $8.6
million, or 1.57% of total loans, at September 30, 2015. The
ALL to non-performing loans was 1,259.18%, 1,203.03% and 1,213.93%
at December 31, 2015, December 31, 2014 and September 30, 2015,
respectively.
- Investment securities were $74.0 million at December 31, 2015,
representing 10.1% of our total assets, compared to $79.7 million,
or 13.6% of our total assets, at December 31, 2014 and $73.1
million, or 10.2% of our total assets, at September 30, 2015.
During the year ended December 31, 2015, the Company sold
investment securities with an amortized cost of $5.9 million,
recognizing gains of $75,000. No securities were sold during
the three months ended December 31, 2015. During the quarter
and year ended December 31, 2014, the Company sold investment
securities with an amortized cost of $5.0 million and $59.9
million, respectively, recognizing gains of $196,000 and $1.2
million, respectively.
- The Bank's total risk-based capital ratio was 11.16% at
December 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.
Capital Adequacy
At December 31, 2015, the Company's stockholders' equity totaled
$64.9 million compared to $61.7 million at December 31, 2014.
At December 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 11.16%, 9.91%, 9.91% and 8.92%,
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.
The Company anticipates that, absent further developments, it
may need to raise, at some point over the next several quarters,
additional capital in order to maintain its well-capitalized status
in light of, among other things, continued growth in its loan
portfolio. The Company periodically considers its
alternatives in this regard, which could include issuing shares of
common stock under its previously filed registration statement on
Form S-1 or other capital instruments, and there can be no
assurance as to the form or nature of any such additional capital
or the timing or amount thereof. The Company's ability to
raise any such additional capital is subject to various factors and
uncertainties, many of which are beyond its control, including,
among others, capital market conditions and general economic
conditions. As of December 31, 2015, the Company had deferred
financing costs with respect to the registration statement on Form
S-1 of $173,000.
Balance
Sheet
Total assets at December 31, 2015 were $732.0 million,
representing an increase of $146.7 million, or 25.1%, from $585.2
million at December 31, 2014. Cash and cash equivalents at
December 31, 2015 were $54.6 million, representing a decrease of
$3.9 million, or 6.7%, from $58.5 million at December 31, 2014.
Loans increased by $155.6 million, from $442.9 million at
December 31, 2014 to $598.4 million at December 31, 2015.
Loan originations were $69.6 million and $291.7 million during the
quarter and year ended December 31, 2015, compared to $55.5 million
and $226.3 million during the same periods last year.
Prepayment speeds for the quarter and year ended December 31, 2015
were 8.9% and 11.8%, compared to 14.7% and 16.7% for the same
periods last year. Investment securities were $74.0 million
at December 31, 2015, compared to $79.7 million at December 31,
2014, representing a decline of $5.7 million, or 7.1%. During
the year ended December 31, 2015, the Company sold investment
securities with an amortized cost of $5.9 million, recognizing
gains of $75,000. No securities were sold during the three
months ended December 31, 2015. During the quarter and year
ended December 31, 2014, the Company sold investment securities
with an amortized cost of $5.0 million and $59.9 million,
respectively, recognizing gains of $196,000 and $1.2 million,
respectively. The weighted average life of our investment
securities was 3.85 years and 4.02 years at December 31, 2015 and
December 31, 2014, respectively.
Total liabilities at December 31, 2015 increased by $143.5
million, or 27.4%, to $667.0 million compared to $523.5 million at
December 31, 2014. This increase is primarily due to a $95.0
million increase in deposits and a $50.0 million overnight
borrowing with the FHLB at December 31, 2015. The overnight
borrowing was repaid in January 2016. Total core deposits,
which includes non-interest bearing demand deposits, interest
bearing demand deposits and money market deposits and savings, were
$550.4 million and $462.4 million at December 31, 2015 and December
31, 2014, respectively, representing an increase of $88.0 million,
or 19.0%.
Credit Quality
Allowance and Provision for Loan Losses
The ALL was $9.0 million, or 1.50% of our total loan portfolio,
at December 31, 2015, compared to $7.6 million, or 1.72% of our
total loan portfolio, at December 31, 2014. At December 31,
2015 and December 31, 2014, our non-performing loans were $712,000
and $632,000, respectively. The ratio of our ALL to
non-performing loans was 1,259.18% and 1,203.03% at December 31,
2015 and December 31, 2014, respectively. In addition, our
ratio of non-performing loans to total loans was 0.12% and 0.14% at
December 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 and year ended December 31, 2015, we recorded a provision
for loan losses of $300,000 and $1.3 million, respectively,
compared to none and $100,000 for the same periods last year.
The increase in our provision for loan losses during the quarter
and year ended December 31, 2015 compared to the same periods last
year was primarily attributable to the increase in the growth rate
of our loan portfolio during the quarter and year ended December
31, 2015. During the quarter and year ended December 31,
2015, the Bank's loan portfolio increased by 9.0% and 35.1%,
respectively, compared to increases of 5.8% and 15.5% during the
same periods last year.
Criticized and classified loans generally consist of special
mention, substandard and doubtful loans. Special mention,
substandard and doubtful loans were $179,000, $759,000 and none,
respectively, at December 31, 2015, compared to $180,000, $1.9
million and none, respectively, at December 31, 2014. We had
net recoveries of $22,000 and $37,000 during the quarter and year
ended December 31, 2015, compared to net recoveries of $22,000 and
$263,000 for the same periods last year. At December 31,
2015, the ALL to total loans was 1.50% 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 December
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 $712,000 and $632,000 at December
31, 2015 and December 31, 2014. Non-accrual loans totaled
$712,000 and $632,000 at December 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 December 31, 2015 and
December 31, 2014, respectively.
Net Interest Income and Margin
During the quarter and year ended December 31, 2015, net
interest income was $6.2 million and $22.9 million, respectively,
compared to $5.0 million and $18.5 million for the same periods
last year. The improvement in net interest income was
primarily attributable to increases in the average balances of our
loan portfolio during the quarter and year ended December 31, 2015
as compared to the same periods last year. The average
balances of our loan portfolio were $563.1 million and $514.7
million during the quarter and year ended December 31, 2015,
compared to $431.6 million and $404.3 million for the same periods
last year.
The Company's net interest margin (net interest income divided
by average interest earning assets) was 3.47% for the quarter ended
December 31, 2015, compared to 3.26% 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 78.8% during the quarter ended
December 31, 2015, compared to 71.5% during the same period last
year.
The Company's net interest margin was 3.50% for the year ended
December 31, 2015, compared to 3.28% for the same period last
year. As discussed above, the improvement in our net interest
margin is primarily due to an increase in the average balance of
loans relative to total earning assets as compared to the same
period last year. The percentage of average loans to total
average earning assets increased to 78.5% during the year ended
December 31, 2015, compared to 71.7% during the same period last
year.
Non-Interest Income
Non-interest income was $149,000 and $668,000 for the quarter
and year ended December 31, 2015, respectively, compared to
$335,000 and $1.7 million for the same periods last year.
During the year ended December 31, 2015, the Company sold
investment securities with an amortized cost of $5.9 million,
recognizing gains of $75,000. No securities were sold during
the three months ended December 31, 2015. During the quarter
and year ended December 31, 2014, the Company sold $5.0 million and
$59.9 million of investment securities, recognizing gains of
$196,000 and $1.2 million. With the exception of such gains,
non-interest income primarily consists of customer related fee
income.
Non-Interest Expense
Non-interest expense was $4.6 million and $17.8 million for the
quarter and year ended December 31, 2015, compared to $4.2 million
and $15.8 million for the same periods last year. The
increases in non-interest expense during the quarter and year ended
December 31, 2015 as compared to the same periods last year is
primarily due to the costs incurred to expand the Bank's business
development and related operational support teams, as well as
additional costs incurred to sustain the Bank's growth during these
periods.
Income Tax Provision
During the quarter and year ended December 31, 2015, we recorded
tax provisions of $660,000 and $1.9 million, respectively, compared
to $575,000 and $1.9 million for the same periods last
year.
Net Income
For the quarter and year ended December 31,
2015, the Company recorded net income of $869,000, or $0.09 per
diluted share, and $2.6 million, or $0.26 per diluted share,
compared to $554,000, or $0.06 per diluted share, and $2.4 million,
or $0.24 per diluted shares, for the same periods last year.
Included in net income for the quarter and year ended December 31,
2015 are gains in connection with the sale of securities of none
and $75,000, respectively, compared to $196,000 and $1.2 million
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 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 or continued sluggish growth, (5) 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, including regulations regarding capital
requirements, 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 AND NON-GAAP
RECONCILIATION
The following tables present relevant financial data from the
Company's recent performance (dollars in thousands, except per
share data):
|
|
|
December 31, |
Balance Sheet
Results: |
|
2015 |
|
2014 |
|
Total
Assets |
|
$ |
731,950 |
|
|
$ |
585,218 |
|
|
Total
Loans |
|
$ |
598,433 |
|
|
$ |
442,856 |
|
|
Allowance for
Loan Losses ("ALL") |
|
$ |
8,961 |
|
|
$ |
7,599 |
|
|
Non-Performing
Assets |
|
$ |
712 |
|
|
$ |
632 |
|
|
Investment
Securities-AFS, at estimated fair value |
|
$ |
74,010 |
|
|
$ |
79,689 |
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
Non-Interest
Bearing Demand Deposits |
|
$ |
362,451 |
|
|
$ |
282,217 |
|
|
|
Interest
Bearing Demand Deposits |
|
|
32,406 |
|
|
|
25,492 |
|
|
|
Money Market
Deposits and Savings |
|
|
155,572 |
|
|
|
154,706 |
|
|
|
Certificates
of Deposit |
|
|
47,748 |
|
|
|
40,757 |
|
|
|
Total
Deposits |
|
$ |
598,177 |
|
|
$ |
503,172 |
|
|
Other
Borrowings |
|
$ |
65,000 |
|
|
$ |
17,500 |
|
|
Total
Stockholders' Equity |
|
$ |
64,903 |
|
|
$ |
61,693 |
|
|
Gross Loans to
Deposits |
|
|
99.99 |
% |
|
|
88.00 |
% |
|
Ending Book
Value per Share |
|
$ |
6.29 |
|
|
$ |
6.08 |
|
|
Common Shares
Outstanding |
|
|
10,318,884 |
|
|
|
10,140,441 |
|
|
|
|
|
|
|
|
Quarters Ended December 31, |
Quarterly
Operating Results (unaudited): |
|
2015 |
|
2014 |
|
Net Interest
Income |
|
$ |
6,244 |
|
|
$ |
4,955 |
|
|
Provision for
Loan Losses |
|
$ |
300 |
|
|
$ |
-- |
|
|
Gain on Sale
of AFS Securities |
|
$ |
-- |
|
|
$ |
196 |
|
|
Non-Interest
Income |
|
$ |
149 |
|
|
$ |
139 |
|
|
Non-Interest
Expense |
|
$ |
4,564 |
|
|
$ |
4,161 |
|
|
Income Tax
Provision |
|
$ |
660 |
|
|
$ |
575 |
|
|
Net
Income |
|
$ |
869 |
|
|
$ |
554 |
|
|
Basic Earnings
per Share |
|
$ |
0.09 |
|
|
$ |
0.06 |
|
|
Basic Shares
Outstanding |
|
|
9,642,911 |
|
|
|
9,501,209 |
|
|
Diluted
Earnings per Share |
|
$ |
0.09 |
|
|
$ |
0.06 |
|
|
Diluted Shares
Outstanding |
|
|
9,914,375 |
|
|
|
9,228,840 |
|
|
Quarterly Net
Interest Margin* |
|
|
3.47 |
% |
|
|
3.26 |
% |
|
|
|
|
|
|
|
|
Reconciliation of QTD Net Income to Pre-Tax, Pre-Provision
Earnings: |
|
Net
Income |
|
$ |
869 |
|
|
$ |
554 |
|
|
Provision for
Loan Losses |
|
|
300 |
|
|
|
-- |
|
|
Income Tax
Provision |
|
|
660 |
|
|
|
575 |
|
|
Pre-Tax,
Pre-Provision Earnings |
|
$ |
1,829 |
|
|
$ |
1,129 |
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
YTD Operating
Results: |
|
2015 |
|
2014 |
|
Net Interest
Income |
|
$ |
22,942 |
|
|
$ |
18,459 |
|
|
Provision for
Loan Losses |
|
$ |
1,325 |
|
|
$ |
100 |
|
|
Gain on Sale
of AFS Securities |
|
$ |
75 |
|
|
$ |
1,178 |
|
|
Non-Interest
Income |
|
$ |
593 |
|
|
$ |
533 |
|
|
Non-Interest
Expense |
|
$ |
17,784 |
|
|
$ |
15,806 |
|
|
Income Tax
Provision |
|
$ |
1,948 |
|
|
$ |
1,903 |
|
|
Net
Income |
|
$ |
2,553 |
|
|
$ |
2,361 |
|
|
Basic Earnings
per Share |
|
$ |
0.27 |
|
|
$ |
0.25 |
|
|
Basic Shares
Outstanding |
|
|
9,602,008 |
|
|
|
9,431,727 |
|
|
Diluted
Earnings per Share |
|
$ |
0.26 |
|
|
$ |
0.24 |
|
|
Diluted Shares
Outstanding |
|
|
9,857,461 |
|
|
|
9,741,248 |
|
|
YTD Net
Interest Margin |
|
|
3.50 |
% |
|
|
3.28 |
% |
|
|
|
|
|
|
|
|
Reconciliation of YTD Net Income to Pre-Tax, Pre-Provision
Earnings: |
|
Net
Income |
|
$ |
2,553 |
|
|
$ |
2,361 |
|
|
Provision for
Loan Losses |
|
|
1,325 |
|
|
|
100 |
|
|
Income Tax
Provision |
|
|
1,948 |
|
|
|
1,903 |
|
|
Pre-Tax,
Pre-Provision Earnings |
|
$ |
5,826 |
|
|
$ |
4,364 |
|
|
*Percentages are reported on an annualized basis
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)
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1ST Century Bancshares, (NASDAQ:FCTY)
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De Jun 2023 até Jun 2024