SAN DIEGO, July 18, 2006 (PRIMEZONE) -- 1st Pacific Bank of California (OTCBB:FPBS) today announced second quarter 2006 net income of $822,000, an increase of 65.1 percent above the $498,000 reported for the second quarter of 2005. Diluted earnings per share were $0.20 compared with $0.12 for the year-earlier quarter, up 66.7 percent. For the first six months of 2006, earnings were $1.5 million, or $0.36 per diluted share, an increase of 64.7 percent and 63.6 percent, respectively, above 2005 six-month earnings of $920,000, or $0.22 per diluted share.
Second quarter results reflect a continuation of strong loan and deposit growth, supported by margin expansion and good expense control. Highlights include:
-- Loan growth of $54.8 million or 27.5 percent year-over-year,
driven by construction/development and commercial real estate
lending.
-- Expansion of the net interest margin to 5.81 percent for the
second quarter of 2006, an increase of 44 basis points from the
prior-year second quarter; by virtue of its highly
asset-sensitive balance sheet, 1st Pacific has successfully
passed along increased funding costs associated with a growing
level of time deposits.
-- 1st Pacific combines high growth with strong profitability, as
evidenced by its second quarter ROA of 1.18 percent and ROE of
14.05 percent, compared with 0.87 percent and 9.76 percent,
respectively, for the 2005 second quarter,
-- Improved operating efficiencies as revenue growth continues to
outpace operating expenses; the second quarter 2006 efficiency
ratio improved 705 basis points year-over-year, to 61.1 percent.
-- Asset quality continues to be extremely strong, with minimal
losses since the bank's formation in 2000.
-- The opening of a banking office in El Cajon, which will extend
the bank's reach into the East County, providing access to a new
business market.
A. Vincent Siciliano, President and CEO, commented, "Our San Diego market is one of the strongest in the country, with outstanding demographics and $46.4 billion in deposits. 1st Pacific Bank is competing successfully with banks many times its size based on the strong relationship culture we have developed and the unique value proposition we bring to every business customer."
Revenue growth continues to be exceptionally strong. Total revenue, consisting of net interest income and non-interest income, was $4.05 million for the second quarter of 2006, an increase of 33.5 percent over the $3.04 million reported in the prior-year second quarter. Net interest income grew 32.5 percent to $3.9 million, reflecting a 22.5 percent increase in average earning assets and a 44 basis point improvement in the net interest margin above the year-ago quarter, to 5.81 percent. Mr. Siciliano explained that 1st Pacific has successfully passed along increased funding costs by virtue of its highly asset-sensitive balance sheet. Non-interest income for the second quarter of 2006, largely service charges on accounts and income from loan sales, increased $59,000, or 68.1 percent year-over-year, to $145,000.
Expense levels continue to be well-controlled. Noninterest expense was $2.5 million for the current quarter, an increase of $407,000 or 19.7 percent above the June 2005 quarter. Expense increases were primarily related to corporate growth. Salaries and benefits expense rose $272,000 or 21.9 percent above year-earlier levels, reflecting an increase of ten FTE employees to 75. As a ratio to average assets, noninterest expense has been relatively stable year-over-year at 3.56 percent in the June 2006 quarter compared to 3.62 percent for the 2005 quarter.
Asset quality remains exceptionally strong. Mr. Siciliano commented, "We continue to experience virtually no losses, have no foreclosed property on our books, and maintain a steady level of nonperforming loans at approximately $1 million. Our success is the result of high quality lenders using good judgment to effectively manage risk." Nonperforming assets were $1.0 million, or 0.35 percent of assets, at June 30, 2006 compared with $1.0 million in the previous quarter, and $1.1 million for the year-ago quarter. As a percent of the portfolio, nonperforming loans continue to decline; for the June 2005 quarter, nonperforming assets amounted to 0.46 percent of assets. At June 30, 2006, the loan loss reserve was $3.2 million, or 1.24 percent of loans.
Assets reached $287.4 million, an increase of $54.0 million, or 23.1 percent, since June 30, 2005. Of this total, loans accounted for 100 percent of asset growth. Loans outstanding were $254.3 million at quarter-end; the portfolio is primarily commercial-related, with construction/land and commercial real estate accounting for 42.7 percent and 31.3 percent, respectively, of total loans.
Deposits were $249.8 million at June 30, 2006, up $42.9 million or 20.7 percent year-over-year. Time deposits increased $54.8 million from June 30, 2005, and now comprise 46.4 percent of total deposits, up from 27.7 percent a year ago. Mr. Siciliano explained that much of the CD portfolio is of short duration so that management retains flexibility as interest rates change.
At June 30, 2006, shareholders' equity was $23.9 million, an increase of $3.1 million, or 15.0 percent from the year-ago quarter. Equity was 8.31 percent of assets at June 30, 2006 compared with 8.90 percent for the prior-year quarter-end. Shares outstanding at the end of the current quarter were 3,867,160. Mr. Siciliano concluded, "We've completed another excellent quarter, thanks to the dedication of our outstanding staff, the loyalty of our customers, and the support of our shareholders. We are building an exceptional bank, and we are focused on achieving results that meet the expectations of all three of these important stakeholders."
About 1st Pacific Bank of California
1st Pacific Bank is a San Diego-based, locally owned and locally operated financial institution. The bank offers a full complement of business products and services to meet the financial needs of professional firms, small to mid-sized businesses, their owners and the people who work there. Offices are located in the Golden Triangle area of La Jolla, in the Tri-Cities area of Oceanside, in Mission Valley, in Inland North County, and at its newest office in El Cajon. The bank also operates a loan production office serving the Inland Empire in Murrieta. The bank opened Nov. 17, 2000 after raising $11.5 million in an initial public offering. For additional information, visit the Company's web site: www.1stpacbank.com.
Safe Harbor
This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by 1st Pacific Bank with the Securities and Exchange Commission. 1st Pacific Bank undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
1ST PACIFIC BANK OF CALIFORNIA
CONSOLIDATED FINANCIAL HIGHLIGHTS
Quarterly
-----------------------------------------------------
2006 2006 2005 2005 2005
(dollars in 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
thousands --------- --------- --------- --------- ---------
except per
share data)
EARNINGS
Net interest
income $ 3,908 3,652 3,538 3,307 2,950
Provision for
loan losses $ 169 179 70 170 125
NonInterest
income $ 145 120 186 117 86
NonInterest
expense $ 2,477 2,419 2,423 2,061 2,070
Net income $ 822 693 725 705 498
Basic earnings
per share $ 0.21 0.18 0.19 0.18 0.13
Diluted
earnings per
share $ 0.20 0.16 0.17 0.17 0.12
Average
shares
out-
standing(a) 3,866,992 3,852,399 3,849,540 3,849,289 3,842,046
Average
diluted
shares out-
standing(a) 4,136,256 4,238,811 4,227,819 4,207,607 4,168,485
PERFORMANCE
RATIOS
Return on
average
assets 1.18% 1.08% 1.13% 1.18% 0.87%
Return on
average
common
equity 14.05% 12.41% 13.17% 13.25% 9.76%
Net interest
margin (fully
tax-
equivalent) 5.81% 5.87% 5.71% 5.71% 5.37%
Efficiency
ratio 61.13% 64.14% 65.07% 60.20% 68.18%
CAPITAL
Period-ending
equity to
assets 8.31% 8.30% 8.37% 8.41% 8.90%
Book value
per share $ 6.17 5.96 5.77 5.58 5.39
ASSET QUALITY
Net loan
charge-offs
(recoveries) $ 0 1 (3) 11 0
Allowance for
loan losses $ 3,156 2,987 2,809 2,736 2,577
Allowance for
losses to
total loans 1.24% 1.21% 1.22% 1.20% 1.29%
Nonperforming
loans $ 1,011 1,027 1,052 1,167 1,079
Other real
estate owned $ 0 0 0 0 0
Nonperforming
assets to
total assets 0.35% 0.37% 0.40% 0.46% 0.46%
END OF PERIOD
BALANCES
Total Loans $254,341 247,461 230,382 227,860 199,494
Total assets $287,352 277,449 265,582 255,242 233,389
Deposits $249,781 235,590 237,208 210,457 206,889
Shareholders'
equity $ 23,875 23,037 22,230 21,466 20,762
Full-time
equivalent
employees 75 71 69 62 65
AVERAGE BALANCES
Total Loans $246,028 234,133 226,672 214,618 191,148
Total assets $278,573 260,654 253,998 237,840 228,849
Deposits $247,643 228,813 222,452 207,197 202,213
Shareholders'
equity $ 23,456 22,634 21,848 21,114 20,451
(a) Adjusted for 2 for 1 stock split effective June 30, 2005
6 Months Year-To-Date
---------------------
2006 2005
EARNINGS ------- -------
Net interest
income 7,560 5,724
Provision for
loan losses 348 313
Non Interest
income 264 188
Non Interest
expense 4,896 4,047
Net income 1,515 920
Basic earnings
per share 0.39 0.24
Diluted
earnings per
share 0.36 0.22
Average
shares
outstanding(a) 3,859,695 3,831,777
Average
diluted shares
outstanding(a) 4,187,534 4,149,861
PERFORMANCE
RATIOS
Return on
average
assets 1.13% 0.84%
Return on
average
common
equity 13.25% 9.19%
Net interest
margin (fully
tax-equivalent) 5.84% 5.40%
Efficiency ratio 62.58% 68.45%
CAPITAL
Period-ending
equity to assets 8.31% 8.90%
Book value per share 6.17 5.39
ASSET QUALITY
Net loan
charge-offs
(recoveries) 1 0
Allowance for
loan losses 3,156 2,577
Allowance for
losses to
total loans 1.24% 1.29%
Nonperforming loans 1,011 1,079
Other real
estate owned 0 0
Nonperforming
assets to
total assets 0.35% 0.46%
END OF PERIOD BALANCES
Total Loans 254,341 199,494
Total assets 287,352 233,389
Deposits 249,781 206,889
Shareholders'
equity 23,875 20,762
Full-time
equivalent
employees 74 65
AVERAGE BALANCES
Total Loans 240,113 190,745
Total assets 269,663 221,310
Deposits 238,280 195,720
Shareholders'
equity 23,045 20,185
(a) Adjusted for 2 for 1 stock split effective June 30, 2005
1st Pacific Bank of California
CONSOLIDATED REPORTS OF INCOME
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
INTEREST INCOME
Loans and
leases,
including fees $ 5,532,555 $ 3,602,176 $10,573,069 $ 6,983,681
Investment
securities 58,761 65,085 99,408 127,758
Federal funds
sold 224,482 162,858 369,360 225,080
----------- ----------- ----------- -----------
Total interest
income 5,815,798 3,830,119 11,041,837 7,336,519
----------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 1,813,927 817,941 3,283,914 1,527,308
Subordinated
debt and other
borrowings 93,603 62,575 197,848 85,027
----------- ----------- ----------- -----------
Total interest
expense 1,907,530 880,516 3,481,762 1,612,335
----------- ----------- ----------- -----------
Net interest
income 3,908,268 2,949,603 7,560,075 5,724,184
Provision for
loan losses 169,000 125,000 348,000 312,500
----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses 3,739,268 2,824,603 7,212,075 5,411,684
NON INTEREST INCOME
Service charges,
fees and other
income 94,487 79,733 200,330 153,264
Brokered loan
fees and gains
on loan sales 50,283 6,390 64,070 35,072
----------- ----------- ----------- -----------
Total non
interest
income 144,770 86,123 264,400 188,336
NON INTEREST EXPENSE
Salaries and
benefits 1,516,795 1,244,732 3,063,618 2,463,782
Occupancy and
equipment 399,952 329,397 757,363 655,387
Other expense 560,715 495,733 1,075,485 927,916
----------- ----------- ----------- -----------
Total non
interest
expense 2,477,462 2,069,862 4,896,466 4,047,085
----------- ----------- ----------- -----------
Income before
income tax
expense 1,406,576 840,864 2,580,009 1,552,935
Income tax
expense 584,855 343,100 1,065,500 633,000
----------- ----------- ----------- -----------
Net income $ 821,721 $ 497,764 $ 1,514,509 $ 919,935
----------- ----------- ----------- -----------
Basic earnings
per share $0.21 $0.13 $0.39 $0.24
Diluted earnings
per share $0.20 $0.12 $0.36 $0.22
Average shares
outstanding(a) 3,866,992 3,842,046 3,859,695 3,831,777
Average diluted
shares
outstanding(a) 4,136,256 4,168,485 4,187,534 4,149,861
(a) - Adjusted for 2 for 1 stock split effective June 30, 2005
1ST PACIFIC BANK OF CALIFORNIA
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31, JUNE 30,
2006 2005 2005
---- ---- ----
ASSETS
Cash and due from banks $ 7,493,644 $ 5,228,147 $ 6,408,614
Federal funds sold 12,730,000 23,710,000 19,635,000
------------ ------------ ------------
Total cash and cash
equivalents 20,223,644 28,938,147 26,043,614
Investment securities
available for sale 9,687,637 3,145,621 5,133,495
FRB, FHLB and other
equity stock, at cost 1,727,850 1,615,500 1,415,850
Construction & Land 108,682,793 94,912,271 74,142,784
Residential & Comm'l RE 79,590,893 65,122,928 50,291,548
SBA 7a & 504 Loans 19,355,171 21,964,919 21,257,557
Commercial Loans 43,634,218 43,970,126 46,571,660
Other Consumer 3,077,554 4,411,829 7,230,226
------------ ------------ ------------
Total loans and
leases 254,340,629 230,382,073 199,493,775
Allowance for loan
losses (3,156,341) (2,808,883) (2,577,496)
------------ ------------ ------------
Total loans and
leases, net 251,184,288 227,573,190 196,916,279
Premises and equipment,
net 1,693,611 1,592,224 1,638,938
Accrued interest and
other assets 2,834,575 2,716,912 2,241,250
------------ ------------ ------------
Total assets $287,351,605 $265,581,594 $233,389,426
------------ ------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing
demand $ 51,318,114 $ 54,772,554 $ 57,978,666
Interest-bearing
checking 18,699,984 14,539,658 10,732,953
Savings and Money
Market 63,916,866 76,319,842 80,782,688
Time Deposits 115,846,467 91,576,358 57,394,641
------------ ------------ ------------
Total deposits 249,781,431 237,208,412 206,888,948
Subordinated debentures 5,000,000 5,000,000 5,000,000
Other borrowed money 7,000,000 0 0
Accrued interest and
other liabilities 1,695,192 1,142,820 738,621
------------ ------------ ------------
Total liabilities 263,476,623 243,351,232 212,627,569
SHAREHOLDERS' EQUITY
Common stock and
additional paid-in
capital 20,412,313 20,261,472 20,212,822
Retained earnings 3,522,850 2,008,341 578,142
Accumulated other
comprehensive income
(loss) (60,181) (39,451) (29,107)
------------ ------------ ------------
Total shareholders'
equity 23,874,982 22,230,362 20,761,857
Total liabilities
and shareholders'
equity $287,351,605 $265,581,594 $233,389,426
------------ ------------ ------------