updated 4/21/2011 9:16:14 AM ET 2011-04-21T13:16:14

MONTEREY, Calif., April 21, 2011 (GLOBE NEWSWIRE) -- 1st Capital Bank (OTCBB:FISB), one of the most successful de novo banks in the United States, we believe, continued to demonstrate its ability to deliver consistent financial results of profitable earnings during the first quarter of 2011. The Bank reported net income of $596,000 for the first quarter ended March 31, 2011 compared to $16,000 for the same period last year (a $580,000 increase). The Bank's earnings were all "core earnings," with no one-time adjustments and/or reliance upon changeable noninterest income sources.

Key Performance Factors of First Quarter 2011 Results:

  • Exceptional credit quality
  • Continued strong loan growth and loan performance
  • Core deposits growth of $25 million compared to the first quarter of 2010
  • Well capitalized, with a total risk based capital ratio of 17.5%
  • Net income of $596,000

Total assets grew to $222 million as of March 31, 2011 compared to $196 million for the same quarter a year ago. The balance of total assets decreased by $5 million compared to $227 million at December 31, 2010 due to the seasonal nature of customer businesses. Total gross loans, which comprise the majority of the Bank's assets, grew to $183 million at March 31, 2011, a 29% growth over the same quarter a year ago and 3% growth over year-end. Total deposits grew to $192 million, which was an increase of $25 million compared to the same quarter a year ago. 1st Capital Bank continued to grow its valuable mix of "core" deposits, as demand and savings accounts were 75% of total accounts as of March 31, 2011.

"I'm extremely proud of our continued efforts to grow 1st Capital Bank in a sound and profitable manner, as reflected at March 31, 2011 in the Bank's financial results and 'well capitalized' condition," stated President and Chief Executive Officer, Fred Rowden. "From day one, it has always been our commitment to shareholders, employees, and clients to create a financially sound bank which is responsive to the financial needs of our community," said Mr. Rowden. As of March 31, 2011, the Bank's Total Risk Based Capital Ratio of 17.5% was over twice the regulatory minimum.

1st Capital Bank has been recognized for its outstanding financial performance by receiving a five-star "Superior" rating from BauerFinancial, Inc in 2010; the only bank headquartered in Monterey, Santa Cruz and San Benito counties to receive such a rating. 1st Capital Bank also received a rating of "Premier Performing Bank" by the Findley Company in 2011.

The Bank's asset quality remained strong, with a ratio of nonperforming loans to total loans of just 0.28% as of March 31, 2011. "We monitor and assess our credit quality on a daily basis. This due diligence analysis of our credit quality, and the character and financial strength of our borrowers, allows us to grow the Bank in a prudent and conservative manner," said Mr. Rowden.

The Bank's Financial Summary for the quarter ended March 31, 2011 is described below. For more information regarding the Bank's growth and performance, please visit our website at www.1stcapitalbank.com , or call 831.264.4000.

About 1st Capital Bank

1st Capital Bank is focused on providing lending, deposit and highly efficient cash management services such as remote deposit and online banking for small to medium size businesses and their owners, along with specialized banking services for the medical and dental industry. The Bank is a full service financial institution with branches located in Monterey, Salinas and King City. The Bank's corporate offices are located at 5 Harris Court, Building N, Suite 3, Monterey, California 93940. Please visit our website at www.1stcapitalbank.com for more information.

Financial Summary

Net income of $596,000 for the quarter ended March 31, 2011 increased $580,000 over net income of $16,000 for the same quarter in the previous year, and increased $154,000 over the net income for the trailing quarter ended December 31, 2010. Diluted earnings per share for the three months ended March 31, 2011 increased to $0.19 compared to $0.01 for the same quarter in 2010.

Total assets of $221,977,000 as of March 31, 2011 increased $26,466,000 (14%) from March 31, 2010 and decreased $4,857,000 from December 31, 2010. Loans grew $40,990,000 or 29% from March 31, 2010 to a total of $183,129,000 outstanding as of March 31, 2011, with $6,142,000 of that growth occurring in the three-month period from December 31, 2010 to March 31, 2011. Loan growth was funded largely by deposits, which grew $24,775,000 or 15% from March 31, 2010 to a total of $192,057,000 as of March 31, 2011, and decreased by $5,220,000 or 3% from the balance outstanding as of December 31, 2010 as seasonal deposits decreased. The remainder of loan growth was funded by a decrease in Fed Funds sold as the Bank deployed a portion of its excess liquidity into loans.

Net interest income after the provision for loan losses for the quarter ended March 31, 2011 was $2,186,000, an increase of $632,000 (41%) over the quarter ended March 31, 2010 and an increase of $24,000 or 1% over the trailing quarter ended December 31, 2010.

Interest income for the quarter ended March 31, 2011 was $2,652,000, an increase of $654,000 (33%) over the quarter ended March 31, 2010 and $63,000 or 2% over the trailing quarter ended December 31, 2010. Average earning assets for the quarter ended March 31, 2011 were $211,353,000, an increase of $28,301,000 (15%) compared to $183,052,000 for the quarter ended March 31, 2010, and increased $14,417,000 or 7% compared to $196,936,000 for the trailing quarter ended December 31, 2010.

Interest expense for the quarter ended March 31, 2011 was $253,000, a decrease of $98,000 (28%) from the quarter ended March 31, 2010 and an increase of $2,000 (1%) from the trailing quarter ended December 31, 2010. Average interest bearing liabilities for the quarter ended March 31, 2011 were $135,039,000, an increase of $16,706,000 (14%) compared to $118,333,000 for the quarter ended March 31, 2010 and an increase of $12,019,000 (10%) compared to $123,020,000 for the trailing quarter ended December 31, 2010. While average balances of interest-bearing deposit liabilities as of March 31, 2011 increased compared to March 31, 2010, interest expense decreased due to the repricing of the interest-bearing deposits, reflecting the lower interest rate environment.

These changes in the composition and pricing of 1st Capital Bank's earning assets and deposit liabilities resulted in a net interest margin for the quarter ended March 31, 2011 of 4.6% compared to 3.6% for the quarter ended March 31, 2010. The net interest margin decreased slightly from the 4.7% recorded for the trailing quarter ended December 31, 2010 due to a change in the mix of deposits as seasonal non-interest bearing demand deposits decreased in the first quarter of 2011.

1st Capital Bank recorded a provision for loan losses of $213,000 during the quarter ended March 31, 2011 compared to $93,000 in the quarter ended March 31, 2010 and $176,000 in the trailing quarter ended December 31, 2010. The ratio of the allowance for loan losses to total loans outstanding was 1.61% at March 31, 2011 compared to 1.53% and 1.54% at March 31, 2010 and December 31, 2010, respectively. The Bank's asset quality remained very strong, with a ratio of impaired and nonperforming loans to total loans of just 0.28% as of March 31, 2011. At March 31, 2010 and December 31, 2010, there were no impaired or nonperforming loans. The Bank has never had any real estate acquired through foreclosure.

Noninterest income increased $4,000 (17%) to $27,000 for the quarter ended March 31, 2011 compared to the quarter ended March 31, 2010 and decreased $4,000 (13%) compared to the trailing quarter ended December 31, 2010, largely due to changes in the outstanding balances of non-interest bearing deposits.

Noninterest expenses increased by $57,000 (4%) to $1,617,000 for the quarter ended March 31, 2011 compared to the quarter ended March 31, 2010 and increased $12,000 (1%) compared to the trailing quarter ended December 31, 2010. The majority of this increase was due to the overall growth of the Bank including the addition of several new employees during the prior year.

Forward-Looking Statements

In addition to the historical information contained herein, this press release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. The reader of this press release should understand that all such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause such a difference include, among other matters, changes in interest rates; economic conditions including inflation and real estate values in California and the Bank's market areas; governmental regulation and legislation; credit quality; competition affecting the Bank's businesses generally; the risk of natural disasters and future catastrophic events including terrorist related incidents and other factors beyond the Bank's control; and factors discussed in the Bank's periodic reports under the Securities Exchange Act of 1934, as amended, on Forms 10-K, 10-Q and 8-K filed with the FDIC. The Bank does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.

 
 1ST CAPITAL BANK
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
     
  3 Months Ended

March 31,
Statement of Income Data 2011 2010
Interest income    
Loans (including fees) $2,527 $1,841
Investment securities 106 116
Other 19 41
Total interest income 2,652 1,998
Interest expense    
Interest on deposits 253 351
Other   --   -- 
Total interest expense 253 351
Net interest income 2,399 1,647
Provision for loan losses 213 93
Net interest income after provision for loan losses 2,186 1,554
     
Noninterest income    
Service charges on deposits 13 9
Other 14 14
Total noninterest income 27 23
     
Noninterest expenses    
Salaries and benefits 909 854
Occupancy 138 140
Furniture and equipment 77 67
Other 493 499
Total noninterest expenses 1,617 1,560
Income before provision for income taxes 596 17
Provision for income taxes  --  1
Net income $596 $16
     
Common Share Data     
Earnings per share     
Basic $0.19 $0.01
Diluted $0.19 $0.01
     
Weighted average shares outstanding 3,157,699 3,157,699
Weighted average shares outstanding - diluted 3,159,662 3,157,699
Book value per share $9.21 $8.69
Tangible book value $9.21 $8.69
Shares outstanding  3,157,699 3,157,699
 
 
 
1ST CAPITAL BANK
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
     
  March December
Balance Sheet Data 2011 2010
Assets    
Cash and due from banks $6,506 $6,672
Federal funds sold and overnight deposits 15,917 25,530
Available-for-sale securities, at fair value, and interest bearing deposits 16,750 17,591
Loans:    
Commercial 77,193 74,311
Real estate-construction 2,684 2,678
Real estate-other 100,841 97,581
Consumer 1,996 1,991
Deferred loan fees, net 415 426
Total loans 183,129 176,987
Allowance for loan losses (2,936) (2,723)
Net loans 180,193 174,264
Premises and equipment, net 687 745
Accrued interest receivable and other assets 1,924 2,032
Total assets $221,977 $226,834
     
Liabilities and Shareholders' Equity    
Deposits:    
Demand, noninterest bearing $48,997 $71,654
Demand, interest bearing 62,587 46,410
Savings 32,744 26,807
Time 47,729 52,406
Total deposits 192,057 197,277
Accrued interest payable and other liabilities 823 1,083
Shareholders' equity 29,097 28,474
Total liabilities and shareholders' equity $221,977 $226,834
     
Asset Quality    
Loans past due 90 days or more and accruing interest  $ --   $ -- 
Nonaccrual loans 515  -- 
Restructured loans  --   -- 
Other real estate owned  --   -- 
Total nonperforming assets $515  $ -- 
     
Allowance for loan losses to total loans 1.61% 1.54%
Allowance for loan losses to NPL's 570.00% n/a
Allowance for loan losses to NPA's 570.00% n/a
     
Regulatory Capital and Ratios    
Tier 1 capital $28,849 $28,210
Total risk based capital $31,075 $30,411
Tier 1 capital ratio 16.3% 16.1%
Total risk based capital ratio 17.5% 17.3%
Tier 1 leverage ratio 13.3% 13.9%
 
 
 
1ST CAPITAL BANK
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
     
  3 Months Ended

March 31,
 
Selected Financial Ratios 2011 2010
Return on average total assets 1.11% 1.28%
Return on average shareholders' equity 8.39% 8.82%
Net interest margin (tax equivalent basis) 4.60% 3.65%
Efficiency ratio (tax equivalent basis) 66.65% 93.41%
     
     
Selected Average Balances    
Loans $181,415 $135,208
Taxable investments 14,191 11,485
Federal funds sold and CDs 15,747 36,359
Total earning assets $211,353 $183,052
Total assets $217,950 $189,262
     
Demand deposits - interest bearing $56,807 $48,435
Savings 29,247 26,385
Time deposits 48,985 43,513
Total interest bearing liabilities $135,039 $118,333
Demand deposits - noninterest bearing $53,081 $42,657
Shareholders' equity $28,808 $27,419
CONTACT: Jayme Fields, CFO
         (831) 264-4011

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