CERRITOS, Calif.--(BUSINESS WIRE)--First Choice Bank, the “Bank” (OTCBB: FCBK), continued its strong earnings and credit quality performance for the first quarter of 2014. The Bank continued to demonstrate diligent operating efficiency, while capital ratios were improved during the quarter with nearly $10 million of common equity raised in a private placement. The Bank’s capital ratios remain strong, Tier 1 risk-based capital and total risk-based ratios at 12.0% and 13.3%, compared to the well capitalized requirements of 6% and 10%, respectively.
First Choice Bank posted exceptionally strong earnings in light of the continuing low interest rate environment evident throughout the financial services industry. Earnings for the first quarter of 2014 were $1,002,000 compared to $462,000 in the first quarter of 2013. The Bank has now had 18 consecutive quarters of profitability. The Bank was able to post strong earnings, while increasing the Allowance for Loan Losses to prepare for future growth and help mitigate any concentration issues in the Bank’s portfolio. Nonperforming assets as a percent of total assets at 0.12% is well below peer and industry average. There were no loans in the Bank’s portfolio more than 30 days past due.
Total assets were $484,361,000, a 10.1% increase over December 31, 2013, and a 36.3% increase over the same quarter in the previous year. Total deposits were $431,261,000, a 13.6% increase over December 2013, and a 41.3% increase over the same quarter in the previous year. Capital for first quarter 2014 increased by $10,690,000 ending at $43,175,000. The increase was mainly attributable to $9,892,000 of private placement capital raised to support the Bank’s continuing growth and increase the Bank’s legal lending limit.
The Bank’s loan portfolio decreased to $344,557,000 at the end of the first quarter 2014, compared to $348,696,000 for the fourth quarter of 2013, a decrease of 1.2%. The decrease was primarily attributed to the Bank’s decision to sell approximately $25 million of single family residential mortgages to reduce the Bank’s concentration in that product type and to allow the Bank to have capacity to generate additional jumbo single family mortgages for its own portfolio. The investment securities portfolio decreased by $5,804,000 to $50,252,000. Cash and due from Banks increased by $55,549,000 to $86,106,000, an increase of 181.8%. The increased liquidity should allow the Bank to fund future loan growth. Loan demand in the quarter was robust, and management believes that loan growth will continue to increase throughout the coming year.
On March 27, 2014, the Board declared a dividend to common shareholders of $0.20 per share, almost twice the amount of the dividend paid to shareholders in 2013. The dividend is payable on May 8, 2014 to shareholders of record on April 8th.
For the third consecutive year, First Choice Bank was honored to be recognized with the 2013 Bank Enterprise Award (BEA). The BEA Program encourages Federally Insured Depository Institutions to increase their investments in Community Development Financial Institutions (CDFIs) through grants, loans, deposits and other financial and technical assistance within the community. In 2013, the Bank received a grant of $323,000 from the US Treasury. The Bank’s commitment to the CDFI Fund is just one measure of its strong commitment to the community.
Peter H. Hui, Chairman of the Board, stated, “In 2013, the Bank had a very good year. I am pleased that 2014 is starting off even better. In light of the strong performance in 2013, the Board has announced a common stock dividend of $0.20 per share. Our Board is pleased to share the fruits of the Bank’s success with all of our shareholders.”
Robert M. Franko, President and Chief Executive Officer, stated, “With our enhanced capital and liquidity, we hope to continue to grow and expand the Bank’s efforts within our footprint, ever conscious of the importance of our strong credit quality.”
Selected Financial Highlights as of March 31, 2014:
Return on average equity (annualized) at 10.33%.
Allowance for Loan and Lease Losses at 1.88% of total loans.
Tier 1 Risk-Based Capital and total Risk-Based Ratios at 12.0% and 13.3%, above 6% and 10%, respectively; Tier 1 Leverage Ratio at 9.70%, compares very favorably to 5.00%, which is the minimum required for a bank to be deemed “Well Capitalized” by the FDIC.
ABOUT FIRST CHOICE BANK
First Choice Bank, headquartered in Cerritos, California, is a community focused financial institution, serving diverse consumers and commercial clients and specializing in loans to small businesses, Commercial and Industrial (C&I) loans, residential mortgage loans and commercial real estate loans with a niche in providing finance for the hospitality industry. The Bank is a Preferred Small Business Administration (SBA) Lender. The Bank recently started a private banking operation. Founded in 2005, First Choice Bank has quickly become a leading provider of financial services that enable our customers to grow, maintain strength, and reach unprecedented levels of success. We strive to surpass our clients' expectations through our efficiency and professionalism and are committed to being “First in Speed, Service, and Solutions.” First Choice Bank stock is traded on the Over the Counter Bulletin Board (OTCBB); our Ticker Symbol is FCBK.
The Bank's web site is www.FirstChoiceBankCA.com.
Except for the historical information in this news release, the matters described herein contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and charge-offs, results of examinations by our banking regulators, our ability to maintain adequate levels of capital and liquidity, our ability to manage loan delinquency rates, our ability to price deposits to retain existing customers and achieve low-cost deposit growth, manage expenses and lower the efficiency ratio, expand or maintain the net interest margin, mitigate interest rate risk for changes in the interest rate environment, competitive pressures in the banking industry, access to available sources of credit to manage liquidity, the local and national economic environment, and other risks and uncertainties. Accordingly, undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this release. First Choice Bank undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Investors are encouraged to read the First Choice Bank annual reports which are available on our website.
|FIRST CHOICE BANK|
|FIRST QUARTER REPORT / MARCH 31, 2014|
|(all amounts in whole dollars except share and per share information)|
|Cash and due from banks||$||86,106,000||$||30,557,000||$||55,549,000||181.8||%|
|Investment securities - available for sale||50,252,000||56,056,000||(5,804,000||)||-10.4||%|
|Stock Investments, restricted||2,154,000||2,154,000||0||0.0||%|
|Less allowance for loan losses||(6,461,000||)||(5,749,000||)||(712,000||)||12.4||%|
|Premises and equipment, net||847,000||880,000||(33,000||)||-3.8||%|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Noninterest bearing deposits||$||56,231,000||$||43,173,000||$||13,058,000||30.2||%|
|Interest checking accounts||79,067,000||0||79,067,000|
|Money market accounts||50,766,000||70,300,000||(19,534,000||)||-27.8||%|
|Certificates of deposits|
|Total shareholders' equity||43,175,000||32,485,000||10,690,000||32.9||%|
|STATEMENT OF INCOME|
|3 Months ended||3 Months ended||3 Months ended|
|Net interest income||4,073,000||3,946,000||2,434,000|
|Provision for loan losses||705,000||539,000||180,000|
|Net interest income after provision for loan losses||3,368,000||3,407,000||2,254,000|
|Income before income taxes||1,743,000||1,406,000||775,000|
|Provision for income taxes||741,000||226,000||313,000|
|Net income per share-basic (annualized)||$||1.04||$||1.55||$||0.61|
|Return on assets (annualized)||0.88||%||1.16||%||0.53||%|
|Return on equity (annualized)||10.33||%||14.71||%||5.18||%|
|Allowance for loan losses as a percent of total gross loans||1.88||%||1.65||%|
|Nonperforming assets as a percent of total assets||0.12||%||0.14||%|
|Loan to deposit ratio||78.40||%||90.32||%|
|Tier one capital ratio||9.69||%||8.22||%|
|Total risk based capital||