First Choice Bancorp (NASDAQ: FCBP) ("us," "we," "our," or the
"Company"), the holding company of First Choice Bank (the "Bank"),
today reported net income of $7.9 million for the third quarter of
2020, or $0.67 per diluted share, compared to net income of $5.7
million, or $0.49 per diluted share, for the second quarter of
2020. Pre-tax pre-provision income was $12.1 million for the third
quarter of 2020, an increase of $1.9 million, compared to the
pre-tax pre-provision income of $10.3 million for the second
quarter of 2020.
“Our third quarter results demonstrate the
progress we have made transforming First Choice into a
community-focused commercial bank that can provide financial
solutions to our clients and financial performance to our
shareholders,” said Peter Hui, Chairman of the Board. “While
uncertainty remains, we believe our management experience, capital
strength and focus on providing exceptional customer service
position us to increase our market share over the coming
months.”
“The promising trends we observed last quarter
continued as 97% of deferred loans returned to regular payment
schedules, operating leverage drove a 49% efficiency ratio, our net
interest margin remained above 4% and we made progress increasing
our market share in the Southern California market,” said Robert M.
Franko, President and CEO of the Company. “We acted quickly to
offer the Main Street Lending Program to eligible borrowers and
believe it represents an attractive and profitable opportunity to
assist new and existing clients, despite some of the well-known
operating issues associated with the program. While we are
concerned by the recent economic and social turmoil, we believe we
can best serve our clients, our communities and our shareholders by
continuing to act as a pillar of financial stability in the
Southern California markets in which we operate.”
STATEMENT OF INCOME
Net Interest Income
Net interest income for the third quarter of
2020 totaled $21.7 million, an increase of $1.4 million from the
second quarter of 2020 due to higher interest income of $1.3
million, coupled with lower interest expense of $112 thousand. The
increase in net interest income was due primarily to higher
discount accretion from loans acquired in a business combination,
full quarter impact of interest income from PPP loans, strong
organic loan growth, and lower cost of interest-bearing time
deposits. Average loans increased by $154.3 million from organic
loan growth and PPP loans in the third quarter of 2020. The
decrease in interest expense for the third quarter of 2020 was due
primarily to a higher run-off of high cost time deposits and the
Company's proactive strategy to lower the cost of interest-bearing
customer deposits and wholesale brokered CDs. Interest expense on
interest-bearing deposits decreased $204 thousand, partially offset
by an increase of $92 thousand on total borrowings. Interest
expense on the PPP Liquidity Facility ("PPPLF") was $212 thousand
for the third quarter of 2020, compared to $112 thousand in the
second quarter of 2020 due to higher average borrowings.
Net Interest Margin
Net interest margin for the third quarter of 2020 decreased 7
basis points to 4.05% from 4.12% for the second quarter of
2020.
The decrease in the net interest margin was due
primarily to a 17 basis point decrease in loan yields (including
fees and discounts), partially offset by a 5 basis point decrease
in total funding costs. The decrease in loan yields were partially
offset by higher accelerated discount accretion in the third
quarter of 2020. The discount accretion from loans acquired in a
business combination of $835 thousand contributed 16 basis points
to the net interest margin in the third quarter of 2020 compared to
$421 thousand and 9 basis points in the second quarter of 2020.
The decrease in the interest-earning assets
yield and loan yield were driven by the lower market interest rates
and the lower-yielding PPP loans. The yield on loans decreased to
4.77% for the third quarter of 2020, compared to 4.94% for the
second quarter of 2020. The weighted average loan yield for PPP
loans was 2.66%, which lowered the total loan yield by 54 basis
points for the third quarter of 2020, compared to 46 basis points
for the second quarter of 2020.
The cost of funds decreased to 0.29% for the
third quarter of 2020, compared to 0.34% for the second quarter of
2020, due primarily to lower market interest rates, runoff of
higher cost time deposits and active balance sheet management.
Average noninterest-bearing demand deposits decreased $53.0 million
to $730.3 million and represented 46.5% of total average deposits
for the third quarter of 2020, compared to $783.3 million, or 50.7%
of total average deposits, for the second quarter of 2020. The
decrease in average noninterest-bearing demand deposits was
primarily due to our customers' use of funds during the third
quarter of 2020 for the new deposit accounts opened for PPP loans
in the second quarter of 2020. The total cost of deposits decreased
6 basis points to 0.25% for the third quarter of 2020, compared to
0.31% for the second quarter of 2020.
Average borrowings increased $7.3 million to
$152.8 million, coupled with an increase of $112.6 million in
average PPPLF outstanding with an average rate of 0.35% to support
the PPP loans funded. The average cost of total borrowings remained
relatively flat at 0.54% for the third quarter of 2020. Average
senior secured notes decreased $2.1 million to $4.6 million and the
average cost of such borrowings decreased 3 basis points to 3.36%
for the third quarter of 2020.
Provision for Loan Losses
The provision for loan losses for the third
quarter of 2020 decreased $1.1 million to $1.0 million, compared to
$2.1 million for the second quarter of 2020. The driver for the
third quarter provision was organic growth in the loan portfolio.
While the economy gradually reopened in the second quarter of 2020,
the timing of an economic recovery continues to remain uncertain.
The assumptions underlying the COVID-19 related qualitative factors
included (a) uncertain and volatile macro-economic conditions
caused by the pandemic; (b) a stabilized unemployment rate; and (c)
the loan deferment program and Main Street Lending Program. No
provision for loan losses was taken on PPP loans as the SBA
guarantees 100% of loan principal under the program.
Noninterest Income
Noninterest income for the third quarter of 2020
was $1.9 million, an increase of $888 thousand from $1.1 million
for the second quarter of 2020 due primarily to higher gains on
loan sales of $990 thousand and higher net servicing fees of $237
thousand, partially offset by lower other income of $387 thousand.
SBA loans sold during the third quarter of 2020 totaled $6.2
million resulting in a gain on sale of $504 thousand. Gains on loan
sales for the third quarter of 2020 also included the sale of 95%
of the principal balance of Main Street loans resulting in gains of
$486 thousand. There were no gains on loan sales in the second
quarter of 2020. The $237 thousand increase in net servicing fees
was due primarily to lower amortization of servicing asset from
early loan pay-offs which totaled $68 thousand for the third
quarter of 2020 compared to $277 thousand for the second quarter of
2020. Other income decreased $387 thousand for the third quarter of
2020 due to $153 thousand gain on sale of foreclosed assets and
$233 thousand Community Development Financial Institutions Bank
Enterprise Award (“CDFI BEA”) recognized in the second quarter of
2020. There was no similar income in the third quarter of 2020.
Noninterest Expense
Noninterest expense increased $428 thousand to
$11.5 million for the third quarter of 2020 from $11.1 million for
the second quarter of 2020. This increase was due primarily to
higher salaries and employee benefit expenses, higher FDIC
assessment fees, offset by lower loan related expenses, lower
customer service related expenses, and lower other expenses.
The $740 thousand increase in salaries and
employee benefits was due to higher incentive accruals resulting
from an increase in organic loan production in the third quarter of
2020. The $188 thousand increase in FDIC assessment fees was due
primarily to the organic growth in the total assets during the
third quarter of 2020.
The $167 thousand decrease in loan related
expenses was due primarily to a recovery of expenses in the third
quarter of 2020 and lower expense incurred for the roll-out of PPP
loans in the third quarter of 2020. The $247 thousand decrease in
customer service related expenses was due primarily to lower
average demand deposits for certain deposit accounts during the
third quarter of 2020. The decrease in other expenses resulted from
no provision for unfunded loan commitments recognized in the third
quarter of 2020 compared to a $300 thousand provision for unfunded
loan commitments in the second quarter of 2020. Total unfunded loan
commitments decreased $2.5 million to $390.9 million at September
30, 2020 from $393.4 million at June 30, 2020.
The efficiency ratio remained favorable and
decreased to 48.7% in the third quarter of 2020, compared to 52.0%
in the second quarter of 2020. The lower efficiency ratio in the
third quarter of 2020 was driven by higher revenue including the
gains from SBA and Main Street loan sales.
Income Taxes
Income tax expense was $3.3 million for the
third quarter of 2020 compared to $2.4 million for the second
quarter of 2020. The effective tax rate was 29.3% for the third
quarter of 2020 and 29.8% for the second quarter of 2020. The
effective tax rate for the full year of 2020 is expected to be in
the range of 29% to 30%.
STATEMENT OF FINANCIAL CONDITION
Loan Portfolio
Total loans held for investment increased $53.3
million in the third quarter of 2020, or 2.9%, to $1.88 billion at
September 30, 2020 due primarily to the organic loan growth and the
Company's participation in the Main Street Lending program. Loans
held for sale increased $16.1 million to $36.5 million as the
Company continued to originate new SBA 7a loans in the third
quarter of 2020.
New loan commitments from organic growth,
excluding PPP loans, totaled $226.2 million for the third quarter
of 2020, compared to $94.3 million for the second quarter of 2020.
The third quarter new loan commitments included $47.3 million in
construction and commercial real estate loans, $119.0 million in
commercial and industrial loans, $23.4 million in SBA loans held
for investment and $36.5 million of SBA loans held for sale. Total
unfunded loan commitments decreased $2.5 million to $390.9 million
at September 30, 2020 from $393.4 million at June 30, 2020 due
to higher utilization on existing lines of credit. During the third
quarter of 2020, borrower drawdown on existing lines of credit
totaled $59.4 million, partially offset by repayments and new
commitments.
PPP Loans
PPP loans, net of unearned fees of $9.9 million,
totaled $390.2 million at September 30, 2020. The unearned fees are
being accreted to income based on the two-year contractual
maturity. The SBA did not act on any PPP loan forgiveness
applications in the third quarter of 2020 and, accordingly, no PPP
loans were forgiven in the quarter. The Company anticipates that
the SBA may begin making determination as to PPP forgiveness
applications in the fourth quarter of 2020 through the first
quarter of 2021, at which point the recognition of fee income will
be accelerated.
For loans originated under the SBA's PPP loan
program, interest and principal payment on these loans were
originally deferred for six months following the funding date,
during which time interest would continue to accrue. On October 7,
2020, the Paycheck Protection Program Flexibility Act of 2020
(“Flexibility Act”) extended the deferral period for borrower
payments of principal, interest, and fees on all PPP loans to the
date that the SBA remits the borrower’s loan forgiveness amount to
the lender (or, if the borrower does not apply for loan
forgiveness, 10 months after the end of the borrower’s loan
forgiveness covered period). The extension of the deferral period
under the Flexibility Act automatically applied to all PPP loans.
At September 30, 2020, the entire portfolio of PPP loans are
expected to have the 10 months extension until the loan is forgiven
by the SBA.
Main Street Lending Program
The Company participated in the Main Street
Lending Program to support lending to small and medium-sized
businesses that were in sound financial condition before the onset
of the COVID-19 pandemic. Under this program, the Bank originates
loans to borrowers meeting the terms and requirements of the
program, including requirements as to eligibility, use of proceeds
and priority, and sells a 95% participation interest in these loans
to Main Street Facilities, LLC, a special purpose vehicle ("SPV")
organized by the Federal Reserve to purchase the participation
interest from eligible lenders, including the Bank.
During the third quarter of 2020, the Bank
originated four Main Street loans totaling $69.8 million in
principal amount and sold participation interest totaling $66.3
million to the Main Street SPV, resulting in a gain on sale of $486
thousand.
Loan Deferrals
At September 30, 2020, the Company had 12
non-PPP loans totaling $37 million on payment deferral for
COVID-related reasons, down from $626 million at June 30, 2020.
Over 97% of loans that were granted a deferral have resumed making
regular, contractually agreed-upon payments or were paid off. As a
part of the CARES Act, the SBA is paying six months of loan
payments for the Company’s SBA 7a borrowers. One deferred payment
loan is reported as past due, two are reported as nonaccrual and
none are reported as troubled debt restructurings ("TDRs") under
Section 4013 of the CARES Act.
Deposits
Total deposits decreased $45.1 million from the
prior quarter to $1.56 billion at September 30, 2020 due to a
decrease in noninterest-bearing deposit accounts and time deposit
accounts, partially offset by increases in interest-bearing
nonmaturity deposits.
At September 30, 2020, noninterest-bearing
deposits totaled $736.1 million, a decrease of $53.7 million in the
third quarter of 2020, of which $45 million of the decrease was due
to the customers' use of PPP funds during the third quarter of
2020. Interest-bearing nonmaturity deposits increased $28.9 million
due primarily to an increase in brokered deposits.
Noninterest-bearing deposits were $736.1 million and represented
47.2% of total deposits at September 30, 2020, compared to $789.8
million and 49.2% of total deposits at June 30, 2020.
Time deposits decreased $20.3 million due to a
decrease in higher rate customer time deposits which matured in the
third quarter of 2020, coupled with a decrease in brokered time
deposits. At September 30, 2020, brokered time deposits totaled
$101.3 million, compared to $115.5 million at June 30,
2020.
Borrowings
At September 30, 2020, the Company had $253.1
million in borrowings under the PPPLF with a fixed-rate of 0.35%
which was collateralized by PPP loans. The Company also
participated in the FHLB San Francisco's new Recovery Advance loan
program for $10 million at zero percent interest at September 30,
2020 with maturity dates in November 2020 and May 2021.
Credit Quality
Nonperforming loans increased to $13.0 million
at September 30, 2020, compared to $8.4 million at June 30,
2020, and represented 0.69% and 0.46% of total loans held for
investment, respectively. The increase in nonperforming loans was
due to two loans from one relationship totaling $5 million, which
were downgraded to nonaccrual during the third quarter of 2020.
These loans represent completed construction loans on two high
quality ocean view homes in Malibu, California with recent
appraisals indicating less than 50% Loan-to-Appraised Value. There
were no loans over 90 days past due that were still accruing
interest at September 30, 2020. Net charge-offs for the third
quarter of 2020 were $88 thousand, or 0.02% of average loans on an
annualized basis, compared to $496 thousand or 0.11% of average
loans on an annualized basis for the second quarter of 2020. In the
third quarter of 2020, the Company sold all of its foreclosed
assets. Nonperforming assets totaled $13.0 million at September 30,
2020, compared to $9.0 million at June 30, 2020, and
represented 0.58% and 0.41% of total assets, respectively.
Loan delinquencies (30-89 days past due) totaled
$1.2 million at September 30, 2020, compared to $353 thousand at
June 30, 2020. Deferred payment loans which met the
requirement under Section 4013 of the CARES Act are not considered
past due or TDRs.
The allowance for loan losses increased 5.1% to
$18.7 million and represented 0.99% of total loans held for
investment and 144.2% of nonperforming loans at September 30, 2020,
compared to 0.97% and 211.8% at June 30, 2020, respectively.
The allowance for loan losses as a percentage of total loans held
for investment excluding PPP loans, was 1.25% at September 30,
2020. At September 30, 2020, the net carrying value of acquired
loans totaled $173.8 million and included a remaining net discount
of $4.3 million. The discount is available to absorb losses on the
acquired loans and represented 2.5% of the net carrying value of
acquired loans and 0.22% of total gross loans held for
investment.
CAPITAL POSITION
Capital Ratios
The Bank opted into the Community Bank Leverage
Ratio ("CBLR") framework, beginning with the Call Report filed for
the first quarter of 2020. The CBLR replaces the risk-based and
leverage capital requirements in the generally applicable capital
rules. The minimum CBLR was originally 9%, however, on April 23,
2020, the federal banking regulators, implementing the applicable
provisions of the CARES Act, issued interim rules which modified
the CBLR framework so that: (i) beginning in the second quarter
2020 and until the end of the year, a banking organization that has
a leverage ratio of 8% or greater and meets certain other criteria
may elect to use the CBLR framework; and (ii) community banking
organizations will have until January 1, 2022, before the CBLR
requirement is re-established at greater than 9%. Under the interim
rules, the minimum CBLR is 8% beginning in the second quarter and
for the remainder of calendar year 2020, 8.5% for calendar year
2021, and 9% thereafter. The interim rules also maintain a
two-quarter grace period for a qualifying community banking
organization whose leverage ratio falls no more than 1% below the
applicable community bank leverage ratio. In addition, assets
originated under the PPP and covered loans pledged under the PPPLF
are deducted from the average total consolidated assets for
purposes of calculating the CBLR. However, such assets are included
in total consolidated assets for purposes of determining the
eligibility to opt into the CBLR framework.
At September 30, 2020, the Bank's preliminary
CBLR ratio was 10.29% which exceeded all regulatory capital
requirements under the CBLR framework and, accordingly, the Bank
was considered to be ‘‘well-capitalized’’.
Stock Repurchase Program
The Company suspended the stock repurchase
program on March 17, 2020. During the third and second quarter of
2020, there were no repurchases of common stock. The remaining
number of shares authorized to be repurchased under this program
was 695,489 shares at September 30, 2020. Suspending the stock
repurchase program allows the Company to preserve capital and
provide liquidity during the COVID-19 pandemic to meet the credit
needs of the Company’s customers, as well as support small
businesses and the local economies served by the Company through
the Bank's lending and other important services.
About First Choice Bancorp
First Choice Bancorp, headquartered in Cerritos,
California, is the sole shareholder of and the registered bank
holding company for, First Choice Bank. As of September 30, 2020,
First Choice Bancorp had total consolidated assets of $2.26
billion. First Choice Bank, also headquartered in Cerritos,
California, is a community-based financial institution that serves
primarily commercial and consumer clients in diverse communities
and specializes in loans to small- to medium-sized businesses and
private banking clients, commercial and industrial loans, and
commercial real estate loans. First Choice Bank is a Preferred
Small Business Administration (SBA) Lender. First Choice Bank
conducts business through nine full-service branches and two loan
production offices located in Los Angeles, Orange and San Diego
Counties. Founded in 2005, First Choice Bank has quickly become a
leading provider of financial services that enable our customers to
grow, maintain strength, and achieve their business objectives. We
strive to surpass our clients’ expectations through our efficiency,
personalized services and financial solutions and professionalism
and are committed to being “First in Speed, Service, and
Solutions.” First Choice Bank is a strong believer in social
justice and equality and is proud of its cultural- and
gender-diverse workforce. As of September 30, 2020, more than 71%
of the Company's total workforce identified as ethnic minorities
and more than 66% of its workforce and more than 50% of its senior
management identified as female. First Choice Bancorp stock is
traded on the Nasdaq Capital Market under the ticker symbol
“FCBP.”
First Choice Bank’s website is www.FirstChoiceBankCA.com.
Non-GAAP Financial Measures
This press release contains certain non-GAAP
financial measures in addition to results presented in accordance
with GAAP. The Company uses certain non-GAAP financial measures to
provide meaningful supplemental information regarding the Company's
results of operations and financial condition and to enhance
investors' overall understanding of such results of operations and
financial condition, permit investors to effectively analyze
financial trends of our business activities, and enhance
comparability with peers across the financial services sector.
These non-GAAP financial measures are not a substitute for GAAP
measures and should be read in conjunction with the Company’s GAAP
financial information. A reconciliation of GAAP financial measures
to non-GAAP financial measures is included in the accompanying
financial tables.
Forward-Looking Statements
In addition to historical information, certain
matters set forth herein constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including forward-looking statements relating to
management’s beliefs, projections and assumptions concerning future
results and events. Forward-looking statements include descriptions
of management’s plans or objectives for future operations, products
or services, and forecasts of the Company’s revenues, earnings or
other measures of economic performance. As well, forward-looking
statements may relate to future outlook and anticipated events,
such as the Company's plans and protocols with regard to managing
potential impacts related to the COVID-19 virus, the Company's
strategy to help keep its workforce and local communities safe, the
Company's business continuity protocols and the potential impact on
operations related to COVID-19, and the Company's ability to
successfully advance its development and expansion projects and
achieve its growth objectives. These forward-looking statements
involve risks and uncertainties, based on the beliefs and
assumptions of management and on the information available to
management at the time that this presentation was prepared and can
be identified by the fact that they do not relate strictly to
historical or current facts. They often include the words or
phrases such as “aim,” “can,” "may," "could," "predict," "should,"
"will," "would," "believe," "anticipate," "estimate," "expect,"
“hope,” "intend," "plan," "potential," ‘project,” "will likely
result," "continue," "seek," “shall,” “possible,” "projection,"
“optimistic,” and "outlook," and variations of these words and
similar expressions or the negative version of those words or
phrases.
Forward-looking statements involve substantial
risks and uncertainties, many of which are difficult to predict and
are generally beyond our control. Many factors could cause actual
results to differ materially from those contemplated by these
forward-looking statements. The Company does not undertake, and
specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements except as
required by law. Any statements about future operating results,
such as those concerning accretion and dilution to the Company's
earnings or shareholders, are for illustrative purposes only, are
not forecasts, and actual results may differ. Risks and
uncertainties that could cause our financial performance to differ
materially from our goals, plans, expectations and projections
expressed in forward-looking statements include those set forth in
our filings with the SEC, including under Item 1A of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2019 as
may be supplemented and/or amended by our Quarterly Reports on Form
10-Q as filed subsequent thereto.
Contacts
First Choice BancorpRobert M. Franko, 562.345.9241President
& Chief Executive Officer
First Choice BancorpKhoi D. Dang, Esq., 562.263.8336Executive
Vice President and General Counsel
First Choice Bancorp and Subsidiary
Financial Highlights and Selected Ratios
(unaudited):
|
|
At or for the Three Months Ended |
|
At or for the Nine Months Ended |
|
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
September 30, 2020 |
|
September 30, 2019 |
|
|
(dollars in thousands, except per share amounts) |
Total interest and dividend
income |
|
$ |
23,154 |
|
|
$ |
21,844 |
|
|
$ |
24,343 |
|
|
$ |
66,742 |
|
|
$ |
68,401 |
|
Total interest expense |
|
1,428 |
|
|
1,540 |
|
|
3,317 |
|
|
5,539 |
|
|
9,347 |
|
Net interest income |
|
21,726 |
|
|
20,304 |
|
|
21,026 |
|
|
61,203 |
|
|
59,054 |
|
Total noninterest income |
|
1,943 |
|
|
1,055 |
|
|
1,673 |
|
|
4,413 |
|
|
6,117 |
|
Total net interest income and
noninterest income |
|
23,669 |
|
|
21,359 |
|
|
22,699 |
|
|
65,616 |
|
|
65,171 |
|
Total noninterest expense |
|
11,528 |
|
|
11,100 |
|
|
10,651 |
|
|
34,147 |
|
|
31,956 |
|
Pre-tax pre-provision income
(1) |
|
12,141 |
|
|
10,259 |
|
|
12,048 |
|
|
31,469 |
|
|
33,215 |
|
Provision for loan losses |
|
1,000 |
|
|
2,100 |
|
|
700 |
|
|
5,800 |
|
|
1,600 |
|
Income before taxes |
|
11,141 |
|
|
8,159 |
|
|
11,348 |
|
|
25,669 |
|
|
31,615 |
|
Income taxes |
|
3,260 |
|
|
2,429 |
|
|
3,277 |
|
|
7,512 |
|
|
9,725 |
|
NET
INCOME |
|
$ |
7,881 |
|
|
$ |
5,730 |
|
|
$ |
8,071 |
|
|
$ |
18,157 |
|
|
$ |
21,890 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,256,342 |
|
|
$ |
2,223,603 |
|
|
$ |
1,655,595 |
|
|
$ |
2,256,342 |
|
|
$ |
1,655,595 |
|
Total loans held for investment |
|
1,884,930 |
|
|
1,831,619 |
|
|
1,316,620 |
|
|
1,884,930 |
|
|
1,316,620 |
|
Noninterest-bearing deposits |
|
736,118 |
|
|
789,770 |
|
|
666,271 |
|
|
736,118 |
|
|
666,271 |
|
Total deposits |
|
1,559,912 |
|
|
1,604,997 |
|
|
1,339,538 |
|
|
1,559,912 |
|
|
1,339,538 |
|
Dividends declared per common
share |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.20 |
|
|
$ |
0.75 |
|
|
$ |
0.60 |
|
Net income per
share-diluted |
|
$ |
0.67 |
|
|
$ |
0.49 |
|
|
$ |
0.68 |
|
|
$ |
1.55 |
|
|
$ |
1.85 |
|
Return on average assets |
|
1.39 |
% |
|
1.09 |
% |
|
1.98 |
% |
|
1.19 |
% |
|
1.86 |
% |
Return on average equity |
|
11.57 |
% |
|
8.59 |
% |
|
12.45 |
% |
|
9.05 |
% |
|
11.60 |
% |
Return on average tangible
common equity (1) |
|
16.31 |
% |
|
12.18 |
% |
|
18.03 |
% |
|
12.83 |
% |
|
16.95 |
% |
Net interest margin |
|
4.05 |
% |
|
4.12 |
% |
|
5.52 |
% |
|
4.28 |
% |
|
5.39 |
% |
Average loan yield |
|
4.77 |
% |
|
4.94 |
% |
|
6.93 |
% |
|
5.15 |
% |
|
6.66 |
% |
Cost of deposits |
|
0.25 |
% |
|
0.31 |
% |
|
0.89 |
% |
|
0.38 |
% |
|
0.84 |
% |
Cost of funds |
|
0.29 |
% |
|
0.34 |
% |
|
0.98 |
% |
|
0.42 |
% |
|
0.95 |
% |
Efficiency ratio (1) |
|
48.7 |
% |
|
52.0 |
% |
|
46.9 |
% |
|
52.0 |
% |
|
49.0 |
% |
Noninterest-bearing deposits
to total deposits |
|
47.2 |
% |
|
49.2 |
% |
|
49.7 |
% |
|
47.2 |
% |
|
49.7 |
% |
Equity to assets ratio |
|
12.08 |
% |
|
12.01 |
% |
|
15.62 |
% |
|
12.08 |
% |
|
15.62 |
% |
Tangible common equity to
tangible asset ratio (1) |
|
8.90 |
% |
|
8.77 |
% |
|
11.37 |
% |
|
8.90 |
% |
|
11.37 |
% |
Book value per share |
|
$ |
23.28 |
|
|
$ |
22.82 |
|
|
$ |
22.20 |
|
|
$ |
23.28 |
|
|
$ |
22.20 |
|
Tangible book value per share
(1) |
|
$ |
16.56 |
|
|
$ |
16.09 |
|
|
$ |
15.38 |
|
|
$ |
16.56 |
|
|
$ |
15.38 |
|
(1) Non-GAAP measure. See GAAP to non-GAAP
Reconciliation.
First Choice Bancorp and Subsidiary
Condensed Consolidated Balance Sheets
(unaudited)
|
|
September 30, 2020 |
|
June 30, 2020 |
|
December 31, 2019
(audited) |
|
|
(dollars in
thousands, except per share amounts) |
ASSETS |
|
|
|
|
|
|
Cash and due from banks |
|
$ |
23,611 |
|
|
|
$ |
20,954 |
|
|
|
$ |
27,359 |
|
|
Interest-bearing deposits at other banks |
|
157,925 |
|
|
|
196,875 |
|
|
|
134,442 |
|
|
Total cash and cash equivalents |
|
181,536 |
|
|
|
217,829 |
|
|
|
161,801 |
|
|
Investment securities, available-for-sale |
|
37,999 |
|
|
|
36,783 |
|
|
|
26,653 |
|
|
Investment securities, held-to-maturity |
|
1,680 |
|
|
|
1,691 |
|
|
|
5,056 |
|
|
Equity securities, at fair value |
|
2,792 |
|
|
|
2,782 |
|
|
|
2,694 |
|
|
Restricted stock investments, at cost |
|
12,999 |
|
|
|
12,999 |
|
|
|
12,986 |
|
|
Loans held for sale |
|
36,474 |
|
|
|
20,326 |
|
|
|
7,659 |
|
|
Total loans held for investment |
|
1,884,930 |
|
|
|
1,831,619 |
|
|
|
1,374,675 |
|
|
Allowance for loan losses |
|
(18,734 |
) |
|
|
(17,822 |
) |
|
|
(13,522 |
) |
|
Total loans held for investment, net |
|
1,866,196 |
|
|
|
1,813,797 |
|
|
|
1,361,153 |
|
|
Accrued interest receivable |
|
11,500 |
|
|
|
13,809 |
|
|
|
5,451 |
|
|
Premises and equipment |
|
2,341 |
|
|
|
2,551 |
|
|
|
1,542 |
|
|
Servicing asset |
|
2,368 |
|
|
|
2,516 |
|
|
|
3,202 |
|
|
Deferred taxes |
|
6,095 |
|
|
|
5,829 |
|
|
|
6,163 |
|
|
Goodwill |
|
73,425 |
|
|
|
73,425 |
|
|
|
73,425 |
|
|
Core deposit intangible |
|
5,149 |
|
|
|
5,342 |
|
|
|
5,728 |
|
|
Foreclosed assets, net |
|
— |
|
|
|
602 |
|
|
|
— |
|
|
Other assets |
|
15,788 |
|
|
|
13,322 |
|
|
|
16,811 |
|
|
TOTAL
ASSETS |
|
$ |
2,256,342 |
|
|
|
$ |
2,223,603 |
|
|
|
$ |
1,690,324 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
736,118 |
|
|
|
$ |
789,770 |
|
|
|
$ |
626,569 |
|
|
Money market, interest
checking and savings |
|
649,613 |
|
|
|
620,719 |
|
|
|
514,366 |
|
|
Time deposits |
|
174,181 |
|
|
|
194,508 |
|
|
|
172,758 |
|
|
Total deposits |
|
1,559,912 |
|
|
|
1,604,997 |
|
|
|
1,313,693 |
|
|
Borrowings |
|
150,000 |
|
|
|
150,000 |
|
|
|
90,000 |
|
|
Paycheck Protection Program
Liquidity Facility |
|
253,140 |
|
|
|
179,125 |
|
|
|
— |
|
|
Senior secured debt |
|
4,400 |
|
|
|
6,500 |
|
|
|
9,600 |
|
|
Accrued interest payable and other liabilities |
|
16,419 |
|
|
|
16,032 |
|
|
|
15,226 |
|
|
Total liabilities |
|
1,983,871 |
|
|
|
1,956,654 |
|
|
|
1,428,519 |
|
|
Total shareholders’
equity |
|
272,471 |
|
|
|
266,949 |
|
|
|
261,805 |
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
2,256,342 |
|
|
|
$ |
2,223,603 |
|
|
|
$ |
1,690,324 |
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
11,705,878 |
|
|
|
11,697,766 |
|
|
|
11,635,531 |
|
|
Book value per share |
|
$ |
23.28 |
|
|
|
$ |
22.82 |
|
|
|
$ |
22.50 |
|
|
Tangible book value per share
(1) |
|
$ |
16.56 |
|
|
|
$ |
16.09 |
|
|
|
$ |
15.70 |
|
|
|
|
|
|
|
|
|
(1) Non-GAAP measure. See GAAP to non-GAAP
Reconciliation.
First Choice Bancorp and Subsidiary
Condensed Consolidated Statements of Income
(unaudited)
|
Three Months Ended |
|
Nine Months Ended September 30, |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
2020 |
|
2019 |
|
(dollars in thousands, except per share amounts) |
INTEREST and DIVIDEND INCOME |
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
$ |
22,671 |
|
|
$ |
21,348 |
|
|
|
$ |
23,206 |
|
|
$ |
64,799 |
|
|
$ |
65,466 |
|
Interest on investment securities |
180 |
|
|
225 |
|
|
|
208 |
|
|
623 |
|
|
659 |
|
Interest on deposits at other financial institutions |
103 |
|
|
92 |
|
|
|
701 |
|
|
696 |
|
|
1,600 |
|
Dividends on FHLB and other stock |
200 |
|
|
179 |
|
|
|
228 |
|
|
624 |
|
|
676 |
|
Total interest and dividend income |
23,154 |
|
|
21,844 |
|
|
|
24,343 |
|
|
66,742 |
|
|
68,401 |
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
Interest on savings, interest checking and money market
accounts |
382 |
|
|
318 |
|
|
|
1,283 |
|
|
1,809 |
|
|
3,776 |
|
Interest on time deposits |
588 |
|
|
856 |
|
|
|
1,605 |
|
|
2,439 |
|
|
4,073 |
|
Interest on borrowings |
207 |
|
|
197 |
|
|
|
253 |
|
|
780 |
|
|
967 |
|
Interest on PPP Liquidity Facility |
212 |
|
|
112 |
|
|
|
— |
|
|
324 |
|
|
— |
|
Interest on senior secured notes |
39 |
|
|
57 |
|
|
|
176 |
|
|
187 |
|
|
531 |
|
Total interest expense |
1,428 |
|
|
1,540 |
|
|
|
3,317 |
|
|
5,539 |
|
|
9,347 |
|
Net interest income |
21,726 |
|
|
20,304 |
|
|
|
21,026 |
|
|
61,203 |
|
|
59,054 |
|
Provision for loan losses |
1,000 |
|
|
2,100 |
|
|
|
700 |
|
|
5,800 |
|
|
1,600 |
|
Net interest income after provision for loan losses |
20,726 |
|
|
18,204 |
|
|
|
20,326 |
|
|
55,403 |
|
|
57,454 |
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
|
|
Gain on sale of loans |
990 |
|
|
— |
|
|
|
528 |
|
|
1,367 |
|
|
2,727 |
|
Service charges and fees on deposit accounts |
495 |
|
|
447 |
|
|
|
475 |
|
|
1,497 |
|
|
1,579 |
|
Net servicing fees (expense) |
228 |
|
|
(9 |
) |
|
|
242 |
|
|
443 |
|
|
763 |
|
Other income |
230 |
|
|
617 |
|
|
|
428 |
|
|
1,106 |
|
|
1,048 |
|
Total noninterest income |
1,943 |
|
|
1,055 |
|
|
|
1,673 |
|
|
4,413 |
|
|
6,117 |
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
7,126 |
|
|
6,386 |
|
|
|
6,472 |
|
|
20,742 |
|
|
19,552 |
|
Occupancy and equipment |
1,137 |
|
|
1,108 |
|
|
|
1,097 |
|
|
3,308 |
|
|
3,513 |
|
Data processing |
955 |
|
|
874 |
|
|
|
718 |
|
|
2,636 |
|
|
1,961 |
|
Professional fees |
492 |
|
|
450 |
|
|
|
392 |
|
|
1,413 |
|
|
1,237 |
|
Office, postage and telecommunications |
274 |
|
|
289 |
|
|
|
253 |
|
|
821 |
|
|
780 |
|
Deposit insurance and regulatory assessments |
386 |
|
|
198 |
|
|
|
30 |
|
|
645 |
|
|
345 |
|
Loan related |
59 |
|
|
226 |
|
|
|
244 |
|
|
560 |
|
|
529 |
|
Customer service related |
81 |
|
|
328 |
|
|
|
437 |
|
|
781 |
|
|
1,187 |
|
Amortization of core deposit intangible |
193 |
|
|
193 |
|
|
|
197 |
|
|
579 |
|
|
590 |
|
Other expenses |
825 |
|
|
1,048 |
|
|
|
811 |
|
|
2,662 |
|
|
2,262 |
|
Total noninterest expense |
11,528 |
|
|
11,100 |
|
|
|
10,651 |
|
|
34,147 |
|
|
31,956 |
|
Income before taxes |
11,141 |
|
|
8,159 |
|
|
|
11,348 |
|
|
25,669 |
|
|
31,615 |
|
Income taxes |
3,260 |
|
|
2,429 |
|
|
|
3,277 |
|
|
7,512 |
|
|
9,725 |
|
Net income |
$ |
7,881 |
|
|
$ |
5,730 |
|
|
|
$ |
8,071 |
|
|
$ |
18,157 |
|
|
$ |
21,890 |
|
|
|
|
|
|
|
|
|
|
|
Net income per share -
diluted |
$ |
0.67 |
|
|
$ |
0.49 |
|
|
|
$ |
0.68 |
|
|
$ |
1.55 |
|
|
$ |
1.85 |
|
Weighted average shares -
diluted |
11,612,270 |
|
|
11,606,280 |
|
|
|
11,659,146 |
|
|
11,616,839 |
|
|
11,714,020 |
|
First Choice Bancorp and Subsidiary
Average Balance Sheets and Yield Analysis
|
Three Months Ended |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
Average Balance |
|
Interest Income / Expense |
|
Yield / Cost |
|
Average Balance |
|
Interest Income / Expense |
|
Yield / Cost |
|
Average Balance |
|
Interest Income / Expense |
|
Yield / Cost |
Interest-earning
assets: |
(dollars in thousands) |
Loans (1) |
$ |
1,892,450 |
|
|
$ |
22,671 |
|
|
4.77 |
% |
|
$ |
1,738,172 |
|
|
$ |
21,348 |
|
|
4.94 |
% |
|
$ |
1,328,088 |
|
|
$ |
23,206 |
|
|
6.93 |
% |
Investment securities |
43,154 |
|
|
180 |
|
|
1.66 |
% |
|
42,553 |
|
|
225 |
|
|
2.13 |
% |
|
35,651 |
|
|
208 |
|
|
2.31 |
% |
Deposits at other financial
institutions |
184,606 |
|
|
103 |
|
|
0.22 |
% |
|
186,741 |
|
|
92 |
|
|
0.20 |
% |
|
134,557 |
|
|
701 |
|
|
2.07 |
% |
Restricted stock investments
and other bank stocks |
14,534 |
|
|
200 |
|
|
5.47 |
% |
|
14,534 |
|
|
179 |
|
|
4.95 |
% |
|
13,988 |
|
|
228 |
|
|
6.47 |
% |
Total interest-earning
assets |
2,134,744 |
|
|
23,154 |
|
|
4.31 |
% |
|
1,982,000 |
|
|
21,844 |
|
|
4.43 |
% |
|
1,512,284 |
|
|
24,343 |
|
|
6.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earning
assets |
119,717 |
|
|
|
|
|
|
127,208 |
|
|
|
|
|
|
108,520 |
|
|
|
|
|
Total
assets |
$ |
2,254,461 |
|
|
|
|
|
|
$ |
2,109,208 |
|
|
|
|
|
|
$ |
1,620,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
$ |
279,945 |
|
|
$ |
111 |
|
|
0.16 |
% |
|
$ |
251,398 |
|
|
$ |
101 |
|
|
0.16 |
% |
|
$ |
116,107 |
|
|
$ |
337 |
|
|
1.15 |
% |
Money market accounts |
338,970 |
|
|
260 |
|
|
0.31 |
% |
|
298,040 |
|
|
207 |
|
|
0.28 |
% |
|
267,493 |
|
|
890 |
|
|
1.32 |
% |
Savings accounts |
31,639 |
|
|
11 |
|
|
0.14 |
% |
|
30,104 |
|
|
10 |
|
|
0.13 |
% |
|
29,070 |
|
|
56 |
|
|
0.76 |
% |
Time deposits |
81,837 |
|
|
201 |
|
|
0.98 |
% |
|
91,051 |
|
|
292 |
|
|
1.29 |
% |
|
147,568 |
|
|
676 |
|
|
1.82 |
% |
Brokered time deposits |
107,347 |
|
|
387 |
|
|
1.43 |
% |
|
90,349 |
|
|
564 |
|
|
2.51 |
% |
|
138,682 |
|
|
929 |
|
|
2.66 |
% |
Total interest-bearing deposits |
839,738 |
|
|
970 |
|
|
0.46 |
% |
|
760,942 |
|
|
1,174 |
|
|
0.62 |
% |
|
698,920 |
|
|
2,888 |
|
|
1.64 |
% |
Borrowings |
152,762 |
|
|
207 |
|
|
0.54 |
% |
|
145,440 |
|
|
197 |
|
|
0.54 |
% |
|
48,263 |
|
|
253 |
|
|
2.08 |
% |
Paycheck Protection Program
Liquidity Facility |
240,602 |
|
|
212 |
|
|
0.35 |
% |
|
127,962 |
|
|
112 |
|
|
0.35 |
% |
|
— |
|
|
— |
|
|
— |
% |
Senior secured notes |
4,620 |
|
|
39 |
|
|
3.36 |
% |
|
6,754 |
|
|
57 |
|
|
3.39 |
% |
|
12,267 |
|
|
176 |
|
|
5.69 |
% |
Total interest-bearing
liabilities |
1,237,722 |
|
|
1,428 |
|
|
0.46 |
% |
|
1,041,098 |
|
|
1,540 |
|
|
0.59 |
% |
|
759,450 |
|
|
3,317 |
|
|
1.73 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
730,306 |
|
|
|
|
|
|
783,258 |
|
|
|
|
|
|
590,212 |
|
|
|
|
|
Other liabilities |
15,530 |
|
|
|
|
|
|
16,684 |
|
|
|
|
|
|
13,984 |
|
|
|
|
|
Shareholders’ equity |
270,903 |
|
|
|
|
|
|
268,168 |
|
|
|
|
|
|
257,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
$ |
2,254,461 |
|
|
|
|
|
|
$ |
2,109,208 |
|
|
|
|
|
|
$ |
1,620,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
$ |
21,726 |
|
|
3.85 |
% |
|
|
|
$ |
20,304 |
|
|
3.84 |
% |
|
|
|
$ |
21,026 |
|
|
4.66 |
% |
Net interest margin |
|
|
|
|
4.05 |
% |
|
|
|
|
|
4.12 |
% |
|
|
|
|
|
5.52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
$ |
1,570,044 |
|
|
$ |
970 |
|
|
0.25 |
% |
|
$ |
1,544,200 |
|
|
$ |
1,174 |
|
|
0.31 |
% |
|
$ |
1,289,132 |
|
|
$ |
2,888 |
|
|
0.89 |
% |
Total funding sources |
$ |
1,968,028 |
|
|
$ |
1,428 |
|
|
0.29 |
% |
|
$ |
1,824,356 |
|
|
$ |
1,540 |
|
|
0.34 |
% |
|
$ |
1,349,662 |
|
|
$ |
3,317 |
|
|
0.98 |
% |
(1) Average loans include net discounts and net
deferred loan fees and costs. Interest income on loans includes
$1.7 million, $1.3 million and $254 thousand related to
the accretion of net deferred loan fees for the quarters ended
September 30, 2020, June 30, 2020 and September 30, 2019. In
addition, interest income includes $835 thousand, $421 thousand and
$2.2 million of discount accretion on loans acquired in a
business combination, including the interest recognized on the
payoff of PCI loans, for the quarters ended September 30, 2020,
June 30, 2020 and September 30, 2019.
First Choice Bancorp and Subsidiary
Average Balance Sheets and Yield Analysis
(continued)
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
Average Balance |
|
Interest Income / Expense |
|
Yield / Cost |
|
Average Balance |
|
Interest Income / Expense |
|
Yield / Cost |
Interest-earning
assets: |
(dollars in thousands) |
Loans (1) |
$ |
1,679,206 |
|
|
$ |
64,799 |
|
|
5.15 |
% |
|
$ |
1,314,513 |
|
|
$ |
65,466 |
|
|
6.66 |
% |
Investment securities |
40,645 |
|
|
623 |
|
|
2.05 |
% |
|
36,355 |
|
|
659 |
|
|
2.42 |
% |
Deposits at other financial
institutions |
176,393 |
|
|
696 |
|
|
0.53 |
% |
|
99,711 |
|
|
1,570 |
|
|
2.11 |
% |
Federal funds sold/resale
agreements |
— |
|
|
— |
|
|
— |
% |
|
1,662 |
|
|
30 |
|
|
2.41 |
% |
FHLB and other bank stock |
14,531 |
|
|
624 |
|
|
5.74 |
% |
|
13,937 |
|
|
676 |
|
|
6.48 |
% |
Total interest-earning
assets |
1,910,775 |
|
|
66,742 |
|
|
4.67 |
% |
|
1,466,178 |
|
|
68,401 |
|
|
6.24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earning
assets |
120,400 |
|
|
|
|
|
|
108,782 |
|
|
|
|
|
|
$ |
2,031,175 |
|
|
|
|
|
|
$ |
1,574,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
$ |
229,436 |
|
|
$ |
473 |
|
|
0.28 |
% |
|
$ |
115,358 |
|
|
$ |
944 |
|
|
1.09 |
% |
Money market accounts |
318,567 |
|
|
1,267 |
|
|
0.53 |
% |
|
270,163 |
|
|
2,658 |
|
|
1.32 |
% |
Savings accounts |
30,008 |
|
|
69 |
|
|
0.31 |
% |
|
30,731 |
|
|
174 |
|
|
0.76 |
% |
Time deposits |
96,764 |
|
|
983 |
|
|
1.36 |
% |
|
156,095 |
|
|
2,080 |
|
|
1.78 |
% |
Brokered time deposits |
96,885 |
|
|
1,456 |
|
|
2.01 |
% |
|
109,598 |
|
|
1,993 |
|
|
2.43 |
% |
Total interest-bearing deposits |
771,660 |
|
|
4,248 |
|
|
0.74 |
% |
|
681,945 |
|
|
7,849 |
|
|
1.54 |
% |
Borrowings |
130,344 |
|
|
780 |
|
|
0.80 |
% |
|
53,987 |
|
|
967 |
|
|
2.39 |
% |
Paycheck Protection Program
Liquidity Facility |
123,138 |
|
|
324 |
|
|
0.35 |
% |
|
— |
|
|
— |
|
|
— |
% |
Senior secured notes |
6,458 |
|
|
187 |
|
|
3.87 |
% |
|
12,190 |
|
|
531 |
|
|
5.82 |
% |
Total interest-bearing
liabilities |
1,031,600 |
|
|
5,539 |
|
|
0.72 |
% |
|
748,122 |
|
|
9,347 |
|
|
1.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
715,180 |
|
|
|
|
|
|
562,195 |
|
|
|
|
|
Other liabilities |
16,405 |
|
|
|
|
|
|
12,281 |
|
|
|
|
|
Shareholders’ equity |
267,990 |
|
|
|
|
|
|
252,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
$ |
2,031,175 |
|
|
|
|
|
|
$ |
1,574,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
$ |
61,203 |
|
|
3.95 |
% |
|
|
|
$ |
59,054 |
|
|
4.57 |
% |
Net interest margin |
|
|
|
|
4.28 |
% |
|
|
|
|
|
5.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
$ |
1,486,840 |
|
|
$ |
4,248 |
|
|
0.38 |
% |
|
$ |
1,244,140 |
|
|
$ |
7,849 |
|
|
0.84 |
% |
Total funding sources |
$ |
1,746,780 |
|
|
$ |
5,539 |
|
|
0.42 |
% |
|
$ |
1,310,317 |
|
|
$ |
9,347 |
|
|
0.95 |
% |
(1) Average loans include net discounts and net
deferred loan fees and costs. Interest income on loans includes
$3.3 million and $721 thousand related to the accretion of net
deferred loan fees for the nine months ended September 30, 2020 and
September 30, 2019. In addition, interest income includes $1.9
million and $3.8 million of discount accretion on loans acquired in
a business combination, including the interest recognized on the
payoff of PCI loans, for the nine months ended September 30, 2020
and September 30, 2019.
First Choice Bancorp and Subsidiary
Loan Composition
|
September 30, 2020 |
|
June 30, 2020 |
|
December 31, 2019 |
|
Amount |
Percentage of Total |
|
Amount |
Percentage of Total |
|
Amount |
Percentage of Total |
|
(dollars in thousands) |
Construction and land
development |
$ |
215,109 |
|
|
11.3 |
% |
|
$ |
218,226 |
|
|
11.8 |
% |
|
$ |
249,504 |
|
|
18.1 |
% |
Real estate: |
|
|
|
|
|
|
|
|
Residential |
30,067 |
|
|
1.6 |
% |
|
39,145 |
|
|
2.1 |
% |
|
43,736 |
|
|
3.2 |
% |
Commercial real estate - owner occupied |
159,603 |
|
|
8.4 |
% |
|
162,508 |
|
|
8.8 |
% |
|
171,595 |
|
|
12.5 |
% |
Commercial real estate - non-owner occupied |
528,201 |
|
|
27.9 |
% |
|
502,693 |
|
|
27.3 |
% |
|
423,823 |
|
|
30.8 |
% |
Commercial and industrial |
361,170 |
|
|
19.0 |
% |
|
335,411 |
|
|
18.2 |
% |
|
309,011 |
|
|
22.5 |
% |
SBA loans (1) |
602,407 |
|
|
31.8 |
% |
|
586,820 |
|
|
31.8 |
% |
|
177,633 |
|
|
12.9 |
% |
Consumer |
8 |
|
|
— |
% |
|
34 |
|
|
— |
% |
|
430 |
|
|
— |
% |
Total loans held for
investment, net of discounts |
$ |
1,896,565 |
|
|
100.0 |
% |
|
$ |
1,844,837 |
|
|
100.0 |
% |
|
$ |
1,375,732 |
|
|
100.0 |
% |
Net deferred loan fees
(1) |
(11,635 |
) |
|
|
|
(13,218 |
) |
|
|
|
(1,057 |
) |
|
|
Total loans held for
investment |
$ |
1,884,930 |
|
|
|
|
$ |
1,831,619 |
|
|
|
|
$ |
1,374,675 |
|
|
|
Allowance for loan losses |
(18,734 |
) |
|
|
|
(17,822 |
) |
|
|
|
(13,522 |
) |
|
|
Total loans held for
investment, net |
$ |
1,866,196 |
|
|
|
|
$ |
1,813,797 |
|
|
|
|
$ |
1,361,153 |
|
|
|
(1) Includes PPP loans with total
outstanding principal of $400.1 million and $400.7 million and net
unearned fees of $9.9 million and $11.5 million at September 30,
2020 and June 30, 2020.
Total loans held for investment
|
September 30, 2020 |
June 30, 2020 |
December 31, 2019 |
|
(dollars in thousands) |
Gross loans held for
investment (1) |
$ |
1,904,019 |
|
|
|
$ |
1,852,768 |
|
|
|
$ |
1,385,142 |
|
|
Unamortized net discounts
(2) |
(7,454 |
) |
|
|
(7,931 |
) |
|
|
(9,410 |
) |
|
Net unamortized deferred
origination fees (1) |
(11,635 |
) |
|
|
(13,218 |
) |
|
|
(1,057 |
) |
|
Total loans held for
investment |
$ |
1,884,930 |
|
|
|
$ |
1,831,619 |
|
|
|
$ |
1,374,675 |
|
|
|
|
|
|
|
|
- Includes PPP loans with total
outstanding principal of $400.1 million and $400.7 million and net
unearned fees of $9.9 million and $11.5 million at September 30,
2020 and June 30, 2020.
- Unamortized net discounts include
discounts related to the retained portion of SBA loans and net
discounts on Non-PCI acquired loans. At September 30, 2020, net
discounts related to loans acquired in the PCB acquisition totaled
$4.3 million that is expected to be accreted into interest income
over a weighted average remaining life of 4.1 years. At
June 30, 2020 and December 31, 2019, net discounts related to
loans acquired in the PCB acquisition totaled $4.8 million and $6.0
million.
Allowance for Loan losses
|
|
Three Months Ended |
|
Nine Months Ended September 30, |
|
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
2020 |
|
2019 |
|
|
(dollars in thousands) |
Balance, beginning of
period |
|
$ |
17,822 |
|
|
|
$ |
16,218 |
|
|
|
$ |
12,053 |
|
|
|
$ |
13,522 |
|
|
|
$ |
11,056 |
|
|
Provision for loan losses |
|
1,000 |
|
|
|
2,100 |
|
|
|
700 |
|
|
|
5,800 |
|
|
|
1,600 |
|
|
Charge-offs |
|
(194 |
) |
|
|
(550 |
) |
|
|
(437 |
) |
|
|
(772 |
) |
|
|
(561 |
) |
|
Recoveries |
|
106 |
|
|
|
54 |
|
|
|
24 |
|
|
|
184 |
|
|
|
245 |
|
|
Net charge-offs |
|
(88 |
) |
|
|
(496 |
) |
|
|
(413 |
) |
|
|
(588 |
) |
|
|
(316 |
) |
|
Balance, end of period |
|
$ |
18,734 |
|
|
|
$ |
17,822 |
|
|
|
$ |
12,340 |
|
|
|
$ |
18,734 |
|
|
|
$ |
12,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized net charge-offs to
average loans |
|
(0.02 |
) |
% |
|
(0.11 |
) |
% |
|
(0.12 |
) |
% |
|
(0.05 |
) |
% |
|
(0.03 |
) |
% |
Credit Quality (1)
|
|
September 30, 2020 |
|
June 30, 2020 |
|
December 31, 2019 |
|
|
(dollars in thousands) |
Accruing loans past due 90
days or more |
|
$ |
— |
|
|
$ |
267 |
|
|
$ |
— |
|
Non-accrual loans |
|
12,847 |
|
|
7,999 |
|
|
11,107 |
|
Troubled debt restructurings
on non-accrual |
|
144 |
|
|
150 |
|
|
158 |
|
Total nonperforming loans |
|
12,991 |
|
|
8,416 |
|
|
11,265 |
|
Foreclosed assets |
|
— |
|
|
602 |
|
|
— |
|
Total nonperforming
assets |
|
$ |
12,991 |
|
|
$ |
9,018 |
|
|
$ |
11,265 |
|
Troubled debt restructurings -
on accrual |
|
$ |
320 |
|
|
$ |
319 |
|
|
$ |
321 |
|
|
|
|
|
|
|
|
Nonperforming loans as a
percentage of total loans held for investment |
|
0.69 |
% |
|
0.46 |
% |
|
0.82 |
% |
Nonperforming assets as a
percentage of total assets |
|
0.58 |
% |
|
0.41 |
% |
|
0.67 |
% |
Allowance for loan losses as a
percentage of total loans held for investment |
|
0.99 |
% |
|
0.97 |
% |
|
0.98 |
% |
Allowance for loan losses as a
percentage of total loans held for investment excluding PPP
loans |
|
1.25 |
% |
|
1.24 |
% |
|
0.98 |
% |
Allowance for loan losses as a
percentage of nonperforming loans |
|
144.21 |
% |
|
211.76 |
% |
|
120.04 |
% |
Allowance for loan losses as a
percentage of nonperforming assets |
|
144.21 |
% |
|
197.63 |
% |
|
120.04 |
% |
Accruing loans held for
investment past due 30 - 89 days |
|
$ |
1,233 |
|
|
$ |
353 |
|
|
$ |
1,767 |
|
(1) Excludes purchased credit impaired loans
with a net carrying value of $792 thousand, $1.0 million and $1.1
million at September 30, 2020, June 30, 2020 and
December 31, 2019.
GAAP to Non-GAAP Reconciliation
The following tables present a reconciliation of
non-GAAP financial measures to GAAP measures for: (1) efficiency
ratio, (2) pre-tax pre-provision income, (3) average tangible
common equity, (4) return on average tangible common equity, (5)
tangible common equity, (6) tangible assets, (7) tangible common
equity to tangible asset ratio, and (8) tangible book value per
share. We believe the presentation of certain non-GAAP financial
measures provides useful information to assess our consolidated
financial condition and consolidated results of operations and to
assist investors in evaluating our financial results relative to
our peers. These non-GAAP financial measures complement our GAAP
reporting and are presented below to provide investors and others
with information that we use to manage the business each period.
Because not all companies use identical calculations, the
presentation of these non-GAAP financial measures may not be
comparable to other similarly titled measures used by other
companies. These non-GAAP measures should be taken together with
the corresponding GAAP measures and should not be considered a
substitute of the GAAP measures.
|
Three Months Ended |
|
Nine Months Ended September 30, |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
2020 |
|
2019 |
Efficiency
Ratio |
(dollars in thousands) |
Noninterest expense
(numerator) |
$ |
11,528 |
|
|
$ |
11,100 |
|
|
$ |
10,651 |
|
|
$ |
34,147 |
|
|
$ |
31,956 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
21,726 |
|
|
$ |
20,304 |
|
|
$ |
21,026 |
|
|
$ |
61,203 |
|
|
$ |
59,054 |
|
Plus: Noninterest income |
1,943 |
|
|
1,055 |
|
|
1,673 |
|
|
4,413 |
|
|
6,117 |
|
Total net interest income and
noninterest income (denominator) |
$ |
23,669 |
|
|
$ |
21,359 |
|
|
$ |
22,699 |
|
|
$ |
65,616 |
|
|
$ |
65,171 |
|
Efficiency ratio |
48.7 |
% |
|
52.0 |
% |
|
46.9 |
% |
|
52.0 |
% |
|
49.0 |
% |
|
|
|
|
|
|
|
|
|
|
Pre-tax pre-provision
income |
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
21,726 |
|
|
$ |
20,304 |
|
|
$ |
21,026 |
|
|
$ |
61,203 |
|
|
$ |
59,054 |
|
Noninterest income |
1,943 |
|
|
1,055 |
|
|
1,673 |
|
|
4,413 |
|
|
6,117 |
|
Total net interest income and
noninterest income |
23,669 |
|
|
21,359 |
|
|
22,699 |
|
|
65,616 |
|
|
65,171 |
|
Less: Noninterest expense |
11,528 |
|
|
11,100 |
|
|
10,651 |
|
|
34,147 |
|
|
31,956 |
|
Pre-tax pre-provision
income |
$ |
12,141 |
|
|
$ |
10,259 |
|
|
$ |
12,048 |
|
|
$ |
31,469 |
|
|
$ |
33,215 |
|
|
|
|
|
|
|
|
|
|
|
Return on Average
Assets, Equity, Tangible Equity |
|
|
|
|
|
|
|
|
|
Net income |
$ |
7,881 |
|
|
$ |
5,730 |
|
|
$ |
8,071 |
|
|
$ |
18,157 |
|
|
$ |
21,890 |
|
|
|
|
|
|
|
|
|
|
|
Average assets |
$ |
2,254,461 |
|
|
$ |
2,109,208 |
|
|
$ |
1,620,804 |
|
|
$ |
2,031,175 |
|
|
$ |
1,574,960 |
|
Average shareholders’
equity |
270,903 |
|
|
268,168 |
|
|
257,158 |
|
|
267,990 |
|
|
252,362 |
|
Less: Average intangible
assets |
78,696 |
|
|
78,901 |
|
|
79,535 |
|
|
78,888 |
|
|
79,730 |
|
Average tangible common
equity |
$ |
192,207 |
|
|
$ |
189,267 |
|
|
$ |
177,623 |
|
|
$ |
189,102 |
|
|
$ |
172,632 |
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
1.39 |
% |
|
1.09 |
% |
|
1.98 |
% |
|
1.19 |
% |
|
1.86 |
% |
Return on average equity |
11.57 |
% |
|
8.59 |
% |
|
12.45 |
% |
|
9.05 |
% |
|
11.60 |
% |
Return on average tangible
common equity |
16.31 |
% |
|
12.18 |
% |
|
18.03 |
% |
|
12.83 |
% |
|
16.95 |
% |
|
As of |
|
September 30, 2020 |
|
June 30, 2020 |
|
December 31, 2019 |
Tangible Common Equity
Ratio/Tangible Book Value Per Share |
(dollars in thousands, except per share amounts) |
Shareholders’ equity |
$ |
272,471 |
|
|
$ |
266,949 |
|
|
$ |
261,805 |
|
Less: Intangible assets |
78,574 |
|
|
78,767 |
|
|
79,153 |
|
Tangible common equity |
$ |
193,897 |
|
|
$ |
188,182 |
|
|
$ |
182,652 |
|
|
|
|
|
|
|
Total assets |
$ |
2,256,342 |
|
|
$ |
2,223,603 |
|
|
$ |
1,690,324 |
|
Less: Intangible assets |
78,574 |
|
|
78,767 |
|
|
79,153 |
|
Tangible assets |
$ |
2,177,768 |
|
|
$ |
2,144,836 |
|
|
$ |
1,611,171 |
|
|
|
|
|
|
|
Equity to assets ratio |
12.08 |
% |
|
12.01 |
% |
|
15.49 |
% |
Tangible common equity to
tangible asset ratio |
8.90 |
% |
|
8.77 |
% |
|
11.34 |
% |
|
|
|
|
|
|
Shares outstanding |
11,705,878 |
|
|
11,697,766 |
|
|
11,635,531 |
|
Book value per share |
$ |
23.28 |
|
|
$ |
22.82 |
|
|
$ |
22.50 |
|
Tangible book value per
share |
$ |
16.56 |
|
|
$ |
16.09 |
|
|
$ |
15.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
First Choice Bancorp (NASDAQ:FCBP)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
First Choice Bancorp (NASDAQ:FCBP)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024