SAN DIEGO, Nov. 3, 2008 (GLOBE NEWSWIRE) -- 1st Pacific Bancorp (Nasdaq:FPBN), the holding company for 1st Pacific Bank of California, today reported earnings of $9,531, or $0.00 per diluted share, for the third quarter of 2008, compared with a net loss of $1.7 million, or $0.34 per diluted share, for the second quarter of 2008, and net income of $685,225, or $0.13 per diluted share, for the third quarter of 2007. 1st Pacific's third quarter results include a $500,000 other-than-temporary impairment charge stemming from its investment in corporate debt of Washington Mutual Inc.
For the first nine months of the year, 1st Pacific reported a loss of $1.3 million, or $0.25 per diluted share, compared with net earnings of $2.0 million, or $0.44 per diluted share for the first nine months of 2007.
During the third quarter, in light of the current economic environment, 1st Pacific implemented steps to further strengthen its capital ratios and improve its liquidity resources. As a result, 1st Pacific Bank remains "well capitalized" by regulatory standards with a Total Risk-Based capital ratio of 11.02% at September 30, 2008, up from 10.98% at June 30, 2008. To be considered "well capitalized" a bank must have over 10% Total Risk-Based capital.
"Our liquidity position remains strong and we continue to maintain capital levels in excess of the well capitalized regulatory guidelines," said Ron Carlson, Acting President and CEO. "The overall improvement in our liquidity position during the quarter resulted from growth in deposits and our reduced loan balances, primarily in commercial real estate loans.
"Our improved liquidity position allowed us to pay down $20 million in FHLB borrowings during the quarter," Carlson continued. "In addition to our strong customer base, we continue to have substantial credit facilities available from the FHLB, the FRB and correspondent banks to meet our liquidity needs going forward. We believe we are in a position to meet the liquidity needs of both the company and our loan and deposit customers."
Balance Sheet Results
During the quarter, total assets decreased $6.6 million to $446 million, and total loans decreased $10.8 million to $366 million compared to the prior quarter. The reduction in loan balances was the result of efforts to reduce commercial real estate concentrations. Deposit growth was solid during the quarter, increasing $13.2 million or 4% over the prior quarter to $358 million at September 30, 2008.
Asset Quality
"Management has been actively assessing the adequacy of the allowance for loan losses based on current market conditions and inherent risks in the portfolio," said Jim Burgess, Chief Financial Officer. "We remain focused on reducing our level of non-performing assets as we continue to work closely with borrowers to help mitigate losses."
Nonperforming assets totaled $13.8 million, or 3.10% of total assets, at September 30, 2008, compared with $11.6 million, or 2.57% of total assets, at the end of the preceding quarter and $6.3 million, or 1.50% of total assets at the end of September 2007.
During the September quarter, a provision of $250,000 was added to the loan loss reserve. The reduction in the allowance for loan losses is a result of $4.0 million in charge-offs recorded in the third quarter. The allowance for loan losses was $4.1 million, or 1.11% of total loans, at September 30, 2008, compared with an allowance of $7.8 million, or 2.08% of total loans, at June 20, 2008, and an allowance of $4.5 million, or 1.28% of total loans, at September 30, 2007.
Review of Operations
For the third quarter of 2008, the net interest margin was 3.90%, compared with 4.32% for the previous quarter, and 5.03% for the third quarter a year ago. For the first nine months of the year, the net interest margin was 4.26% compared with 4.94% for the first nine months of 2007.
The decline in the net interest margin from prior periods results from the asset sensitive balance sheet and the continuing effects of the Federal Reserve rate cuts earlier this year. Additionally, unrecorded interest on non-accrual loans reduced quarterly net interest margin by 38 basis points during the third quarter.
About 1st Pacific Bancorp
1st Pacific Bancorp is the holding company for 1st Pacific Bank of California, San Diego's leading local business bank. The bank has been named a "Premier Performing Bank" for the past three calendar years by Findley Reports and has a rating of "Good" from BauerFinancial, Inc, an independent rating service, based on June 30, 2008 results.
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. 1st Pacific Bank has a total of eight banking offices located in San Diego County: in the University Towne Center area, the Tri-Cities area of Oceanside, Mission Valley, the Inland North County, El Cajon, La Jolla Village, Solana Beach and downtown San Diego. For additional information, visit the company's website at www.1stpacbank.com.
Safe Harbor Statement. 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 Bancorp with the Securities and Exchange Commission. 1st Pacific Bancorp undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
1st Pacific Bancorp
Third Quarter 2008 Results
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
Sept 30, Sept 30, Sept 30, Sept 30,
2008 2007 2008 2007
---------- ---------- ----------- -----------
INTEREST INCOME
Loans, including
fees $6,311,978 $7,710,800 $19,369,779 $19,968,504
Investment securities 508,472 318,829 1,445,475 595,402
Federal funds sold 98,834 244,431 297,549 726,897
---------- ---------- ----------- -----------
Total interest
income 6,919,284 8,274,060 21,112,803 21,290,803
---------- ---------- ----------- -----------
INTEREST EXPENSE
Deposits 2,109,958 3,040,899 6,650,628 7,838,216
Subordinated debt and
other borrowings 530,601 200,810 1,291,711 915,007
---------- ---------- ----------- -----------
Total interest
expense 2,640,559 3,241,709 7,942,339 8,753,223
---------- ---------- ----------- -----------
Net Interest Income 4,278,725 5,032,351 13,170,464 12,537,580
Provision for Loan
Losses 250,000 37,000 3,800,000 188,000
---------- ---------- ----------- -----------
Net interest income
after provision for
loan losses 4,028,725 4,995,351 9,370,464 12,349,580
NON INTEREST INCOME
Service charges, fees
and other income 394,883 177,618 892,374 395,631
Brokered loan fees
and gains on loan
sales 36,874 0 97,824 128,283
---------- ---------- ----------- -----------
Total non interest
income 431,757 177,618 990,198 523,914
NON INTEREST EXPENSE
Salaries and
benefits 2,187,461 2,181,582 6,907,663 5,395,816
Occupancy and
equipment 768,051 787,989 2,275,552 1,589,834
Other expense 1,510,139 1,029,544 3,308,500 2,446,208
---------- ---------- ----------- -----------
Total non interest
expense 4,465,651 3,999,115 12,491,715 9,431,858
---------- ---------- ----------- -----------
Income (Loss) before
income tax expense (5,169) 1,173,854 (2,131,053) 3,441,636
Income tax expense
(benefit) (14,700) 488,629 (881,800) 1,419,532
---------- ---------- ----------- -----------
Net Income (Loss) $9,531 $685,225 ($1,249,253) $2,022,104
========== ========== =========== ===========
Basic earnings (loss)
per share $0.00 $0.14 ($0.25) $0.48
Diluted earnings
(loss) per share $0.00 $0.13 ($0.25) $0.44
Average shares
outstanding 4,964,107 4,910,354 4,954,667 4,233,323
Average diluted
shares outstanding 4,964,107 5,212,129 4,954,667 4,558,044
1st Pacific Bancorp
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Sept 30, Jun 30, Dec 31, Sept 30,
2008 2008 2007 2007
------------ ------------ ------------ ------------
ASSETS
Cash and due from
banks $9,705,635 $8,522,149 $6,397,189 $8,050,507
Federal funds sold 17,110,000 7,605,000 11,160,000 22,390,000
---------------------------------------------------
Total cash and
cash equivalents 26,815,635 16,127,149 17,557,189 30,440,507
Investment
securities
available for
sale 26,398,344 35,856,520 23,746,429 17,449,764
FRB, FHLB and
other equity
stock, at cost 4,942,850 5,574,650 3,184,200 3,439,750
Construction &
Land 116,697,199 125,809,008 125,661,143 132,666,956
Residential &
Comm'l RE 147,698,994 153,096,474 120,530,541 121,601,613
SBA 7a & 504 Loans 9,837,192 12,834,832 15,880,428 16,727,294
Commercial Loans 75,430,725 74,238,526 77,581,769 70,201,589
Other Consumer 16,030,939 10,539,086 10,164,841 8,930,280
---------------------------------------------------
Total loans and
leases 365,695,049 376,517,926 349,818,722 350,127,732
Allowance for Loan
Losses (4,072,629) (7,818,471) (4,516,625) (4,464,714)
---------------------------------------------------
Total loans and
leases, net 361,622,420 368,699,455 345,302,097 345,663,018
Premises and
Equipment, net 3,753,724 3,873,502 4,094,785 3,847,837
Goodwill and Other
Intangible Assets 11,761,501 11,815,393 11,906,536 12,056,095
Accrued Interest
and Other Assets 10,261,628 10,247,757 8,856,089 8,286,535
---------------------------------------------------
Total Assets $445,556,102 $452,194,426 $414,647,325 $421,183,506
===================================================
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Deposits:
Noninterest-
bearing demand $70,505,740 $68,747,742 $73,366,761 $78,140,129
Interest bearing
checking 14,898,330 14,121,446 16,344,597 17,376,099
Savings and Money
Market 88,076,365 115,044,339 98,639,209 100,729,028
Time Deposits 184,118,960 146,437,993 157,011,040 155,912,934
---------------------------------------------------
Total Deposits 357,599,395 344,351,520 345,361,607 352,158,190
Subordinated
Debentures 10,155,000 10,155,000 10,155,000 10,155,000
Other borrowed
money 30,000,000 50,000,000 10,000,000 10,000,000
Accrued interest
and other
liabilities 4,333,754 4,001,547 4,156,771 4,568,134
---------------------------------------------------
Total
liabilities 402,088,149 408,508,067 369,673,378 376,881,324
Shareholders'
Equity:
Common stock and
additional
paid-in capital 37,687,862 37,549,472 37,378,697 37,019,376
Retained Earnings 6,399,787 6,390,257 7,649,040 7,205,962
Accumulated other
comprehensive
income(loss) (619,696) (253,370) (53,790) 76,844
---------------------------------------------------
Total
shareholders'
equity 43,467,953 43,686,359 44,973,947 44,302,182
Total liabilities
and
shareholders' ---------------------------------------------------
equity $445,556,102 $452,194,426 $414,647,325 $421,183,506
===================================================
1st Pacific Bancorp
Third Quarter 2008 Results
(Unaudited)
Quarterly
-------------------------------------------------
(dollars in
thousands except 2008 2008 2008 2007 2007
per share data) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
-------------------------------------------------
EARNINGS
Net interest
income $ 4,279 4,470 4,422 4,703 5,032
Provision for loan
losses $ 250 3,550 0 150 37
NonInterest income $ 432 327 232 186 178
NonInterest
expense $ 4,466 4,140 3,886 3,970 3,999
Net income (loss) $ 10 (1,706) 447 443 685
Basic earnings
(loss) per share $ 0.00 (0.34) 0.09 0.09 0.14
Diluted earnings
(loss) per share $ 0.00 (0.34) 0.09 0.09 0.13
Average shares
outstanding 4,964,107 4,950,263 4,949,524 4,920,795 4,910,354
Average diluted
shares
outstanding 4,964,107 4,950,263 5,167,393 5,163,053 5,212,129
PERFORMANCE RATIOS
Return on average
assets 0.01% -1.55% 0.44% 0.42% 0.66%
Return on average
common equity 0.09% -14.88% 3.94% 3.91% 6.20%
Net interest margin
(fully
tax-equivalent) 3.90% 4.32% 4.60% 4.71% 5.03%
Efficiency ratio 94.80% 86.32% 83.50% 81.20% 76.76%
CAPITAL
Tangible equity to
assets 7.31% 7.24% 8.18% 8.21% 7.88%
Tangible book
value per share $ 6.38 6.44 6.78 6.69 6.56
ASSET QUALITY
Net loan
charge-offs
(recoveries) $ 3,996 223 25 98 (0)
Allowance for loan
losses $ 4,073 7,818 4,492 4,517 4,465
Allowance for
losses to total
loans 1.11% 2.08% 1.31% 1.29% 1.28%
Nonperforming
loans $ 13,816 11,640 4,255 5,554 6,336
Other real estate
owned $ 0 0 0 0 0
Nonperforming
assets to total
assets 3.10% 2.57% 1.01% 1.34% 1.50%
END OF PERIOD
BALANCES
Total Loans $ 365,695 376,518 342,239 349,819 350,128
Total assets $ 445,556 452,194 422,276 414,647 421,184
Deposits $ 357,599 344,352 322,677 345,362 352,158
Shareholders'
equity $ 43,468 43,686 45,414 44,974 44,302
Full-time
equivalent
employees 107 106 109 107 101
AVERAGE BALANCES
Total Loans $ 376,541 364,791 341,070 345,918 352,384
Earning Assets $ 435,327 415,197 385,470 396,221 397,059
Total assets $ 460,575 442,380 411,966 423,198 412,800
Deposits $ 351,748 334,770 338,375 352,717 354,492
Shareholders'
equity $ 44,152 45,989 45,489 44,905 43,840
9 Months Year-To-Date
---------------------
(dollars in thousands except per share data) 2008 2007
----------------------
EARNINGS
Net interest income $ 13,170 12,538
Provision for loan losses $ 3,800 188
NonInterest income $ 990 524
NonInterest expense $ 12,492 9,432
Net income (loss) $ (1,249) 2,022
Basic earnings (loss) per share $ (0.25) 0.48
Diluted earnings (loss) per share $ (0.25) 0.44
Average shares outstanding 4,954,667 4,233,323
Average diluted shares outstanding 4,954,667 4,558,044
PERFORMANCE RATIOS
Return on average assets -0.38% 0.77%
Return on average common equity -3.68% 8.34%
Net interest margin (fully tax-equivalent) 4.26% 4.94%
Efficiency ratio 88.21% 72.21%
CAPITAL
Tangible equity to assets 7.31% 7.88%
Tangible book value per share $ 6.38 6.56
ASSET QUALITY
Net loan charge-offs (recoveries) $ 4,244 (0)
Allowance for loan losses $ 4,073 4,465
Allowance for losses to total loans 1.11% 1.28%
Nonperforming loans $ 13,816 6,336
Other real estate owned $ 0 0
Nonperforming assets to total assets 3.10% 1.50%
END OF PERIOD BALANCES
Total Loans $ 365,695 350,128
Total assets $ 445,556 421,184
Deposits $ 357,599 352,158
Shareholders' equity $ 43,468 44,302
Full-time equivalent employees 107 101
AVERAGE BALANCES
Total Loans $ 360,858 305,034
Earning Assets $ 412,083 339,614
Total assets $ 438,388 349,937
Deposits $ 341,668 294,710
Shareholders' equity $ 45,206 32,417