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PRESS RELEASE
First Community Bancorp
(NASDAQ: FCBP)
Contact: | Matthew P. Wagner President and Chief Executive Officer 120 Wilshire Boulevard Santa Monica, CA 90401 | Lynn M. Hopkins Executive Vice President and Chief Financial Officer 275 North Brea Boulevard Brea, CA 92821 | ||
Phone: | 310-458-1521 × 271 | 714-674-5330 | ||
Fax: | 310-451-4555 | 714-674-5377 |
FOR IMMEDIATE RELEASE | JANUARY 29, 2003 |
FIRST COMMUNITY BANCORP ANNOUNCES EARNINGS FOR THE FOURTH QUARTER OF 2002
Rancho Santa Fe, California. .. First Community Bancorp (Nasdaq: FCBP) today announced consolidated operating income (net income before intangible amortization expense, net of applicable taxes) for the three months ended December 31, 2002 of $6,809,000, or $0.43 per diluted share. This compares with consolidated operating income of $1,394,000 or $0.25 per diluted share, for the three months ended December 31, 2001, an increase of approximately 72%.
Consolidated net income for the three months ended December 31, 2002 was $6,408,000, or $0.41 per diluted share. This compares with consolidated net income of $1,394,000 or $0.25 per diluted share, for the three months ended December 31, 2001. Based on net income for the fourth quarter of 2002, the Company's return on average assets was 1.16% and the efficiency ratio was 65.6% which compares favorably to a return on average assets of 0.71% and an efficiency ratio of 76.1% for the same period in 2001.
Consolidated operating income (net income before intangible amortization expense, net of applicable taxes) for the year ended December 31, 2002 was $17,648,000, or $1.65 per diluted share. For the year ended December 31, 2001 the Company reported consolidated operating income of $6,317,000 or $1.27 per diluted share, representing growth of approximately 30%. Based on operating income for the year ended December 31, 2002, the Company's return on average assets was 1.19% and resulted in an efficiency ratio of 64.4%. This compares to a return on average assets of 0.95% and an efficiency ratio of 69.4% based on operating income for the year ended December 31, 2001.
Consolidated net income for the year ended December 31, 2002 was $16,912,000, or $1.58 per diluted share. This compares with net income of $6,110,000 or $1.23 per diluted share, for the year ended December 31, 2001, representing growth of approximately 28%. Net income for the year ended December 31, 2002 resulted in a return on average assets of 1.14% compared to 0.92% for the prior year and an efficiency ratio of 65.9% for 2002 compared to 70.0% for 2001.
Matt Wagner, President and Chief Executive Officer stated: "We had a productive fourth quarter and are pleased to end the year on a high note, having grown operating earnings per share for the year by roughly 30%, and having continued to demonstrate our ability to effectively acquire and integrate banks. We were able to end the year with a solid loan-to-deposit ratio, and we took advantage of the interest-rate environment to lower our average cost of deposits and achieve a net interest margin of 5.38% for the fourth quarter. The fourth quarter involved focusing efforts around our core businesses
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and integrating the acquisitions completed in the third quarter of Upland Bank, Marathon Bancorp and First National Bank. As a result of and in addition to these internal efforts, we:
- •
- Successfully converted Marathon to the Company's operating platform;
- •
- Completed the acquisition of Bank of Coronado, a $109 million asset bank, which closed as scheduled on January 9, 2003;
- •
- Successfully concluded the sale of substantially all of the loans in the indirect auto loan portfolio. Although the loans were sold at a discount resulting in a loss of $703,000, the sale frees up resources for our Company's lending focus in commercial and real estate markets;
- •
- Averaged a net interest margin of 5.41% for the year despite the 50 basis point downward movement in rates in November 2002, an increase of 8 basis points over the average net interest margin for the year ended December 31, 2001;
- •
- Achieved a cost of deposits of 0.81% for the fourth quarter of 2002;
- •
- Achieved an average loan-to-deposit ratio of 85.0% during the fourth quarter of 2002, an increase of over 10% since the first quarter of 2002;
- •
- Sold smaller odd-lot securities and other securities which met certain interest rate characteristics to generally reposition the securities portfolio to shorter duration vehicles;
- •
- Improved the Company's operating efficiency ratio to 63.4% for the fourth quarter of 2002 compared to 76.1% for the fourth quarter if 2001 and 71.7% for the first quarter of 2002 as a result of operating efficiencies realized through the consolidation of back office operations."
During the fourth quarter 2002, nonaccrual loans remained relatively flat and totaled $10.2 million at December 31, 2002 while nonperforming assets decreased $1.7 million to $13.3 million, or 0.93% of gross loans and OREO. Nonperforming assets declined due mainly to other real estate owned sales of $1.3 million, with related gains of approximately $125,000, and other real estate owned writedowns of $330,000. The ratio of nonaccrual loans to loans, net of deferred fees and costs, was 0.72% as of December 31, 2002, which is slightly higher than the September 30, 2002 ratio of 0.68% due primarily to the decline in loans resulting from the indirect auto loan sale.
During the year ended December 31, 2002 annualized net charge-offs (normalized) as a percentage of average loans decreased to 0.10% from 0.37% for the year ended December 31, 2001. The allowance for loan losses totaled $24.3 million at December 31, 2002 and represents 1.71% of loans, net of deferred fees and costs, and 237.8% of nonaccrual loans as of that date.
Description of First Community
First Community Bancorp is approximately a $2.1 billion bank holding company with two wholly-owned banking subsidiaries, Pacific Western National Bank and First National Bank. First Community provides commercial banking services, including real estate, construction and commercial loans, to small and medium-sized businesses through 35 full-service community banking branches. Pacific Western has 18 branches throughout Los Angeles, Orange, Riverside and San Bernardino Counties and First National Bank, formerly Rancho Santa Fe National Bank, has 17 branches across Imperial and San Diego Counties.
Forward Looking Statements
This press release with respect to First Community Bancorp contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are forward-looking statements. Risks and uncertainties include, but are not limited to: the possibility that expected cost savings cannot be fully realized or realized within the expected time frame; revenues
2
are lower than expected; competitive pressure among depository institutions increases significantly; the cost of integration of acquired businesses costs more, takes longer or is less successful than expected; the cost of additional capital is more than expected; changes in the interest rate environment reduces interest margins; general economic conditions, either nationally or in the market area in which First Community does business, are less favorable than expected; legislation or regulatory requirements or changes adversely affect First Community's business; changes that may occur in the securities markets; and other risks that are described in First Community's Securities and Exchange Commission filings. If any of these uncertainties materializes or any of these assumptions proves incorrect, First Community's results could differ materially from First Community's expectations as set forth in these statements. First Community assumes no obligation and does not intend to update such forward-looking statements.
Investors and security holders are urged to read First Community Bancorp's annual report on Form 10-K for the year ended December 31, 2002 (when it becomes available) and other documents filed by the Company with the Securities and Exchange Commission. The documents filed by First Community with the Commission may be obtained at the Commission's website at http://www.sec.gov. These documents may also be obtained free of charge from First Community by directing a request to: First Community Bancorp c/o Pacific Western Bank, 275 North Brea Boulevard, Brea, CA 92821. Attention: Investor Relations. Telephone 714-671-6800.
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, 2002 | December 31, 2001 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
| (In thousands, except per share data) | |||||||||
Assets: | ||||||||||
Cash and due from banks | $ | 97,666 | $ | 68,513 | ||||||
Federal funds sold | 26,700 | 36,190 | ||||||||
Total cash and cash equivalents | 124,366 | 104,703 | ||||||||
Interest-bearing deposits in financial institutions | 6,135 | 190 | ||||||||
Federal Reserve Bank and Federal Home Loan Bank stock, at cost | 6,991 | 2,137 | ||||||||
Securities held to maturity | 6,684 | 9,681 | ||||||||
Securities available-for-sale | 307,089 | 116,775 | ||||||||
Total securities | 320,764 | 128,593 | ||||||||
Gross loans | 1,429,328 | 502,090 | ||||||||
Deferred fees and costs | (4,932 | ) | (350 | ) | ||||||
Loans, net of deferred fees and costs | 1,424,396 | 501,740 | ||||||||
Allowance for loan losses | (24,294 | ) | (11,209 | ) | ||||||
Net loans | 1,400,102 | 490,531 | ||||||||
Premises and equipment | 13,397 | 5,914 | ||||||||
Other real estate owned, net | 3,117 | 3,075 | ||||||||
Goodwill and core deposit intangible | 188,050 | 9,793 | ||||||||
Other assets | 59,946 | 27,418 | ||||||||
Total Assets | $ | 2,115,877 | $ | 770,217 | ||||||
Liabilities and Shareholders' Equity: | ||||||||||
Liabilities: | ||||||||||
Noninterest-bearing deposits | $ | 657,443 | $ | 275,616 | ||||||
Interest-bearing deposits | 1,081,178 | 401,551 | ||||||||
Total deposits | 1,738,621 | 677,167 | ||||||||
Accrued interest payable and other liabilities | 21,741 | 8,651 | ||||||||
Short-term borrowings | 1,223 | 431 | ||||||||
Convertible debt | — | 671 | ||||||||
Trust preferred securities | 38,000 | 28,000 | ||||||||
Total Liabilities | 1,799,585 | 714,920 | ||||||||
Shareholders' Equity: | ||||||||||
Common stock | 291,803 | 43,137 | ||||||||
Retained earnings | 23,039 | 11,852 | ||||||||
Accumulated other comprehensive income: | ||||||||||
Unrealized gains on securities available-for-sale, net | 1,450 | 308 | ||||||||
Total Shareholders' Equity | 316,292 | 55,297 | ||||||||
Total Liabilities and Shareholders' Equity | $ | 2,115,877 | $ | 770,217 | ||||||
Shares outstanding | 15,297.0 | 5,277.4 | ||||||||
Book value per share | $ | 20.68 | $ | 10.48 |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| 3 Months Ended December 31, | 12 Months Ended December 31, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2002 | 2001 | 2002 | 2001 | ||||||||||||
| (In thousands, except per share data) | | ||||||||||||||
Interest income: | ||||||||||||||||
Interest and fees on loans | $ | 27,360 | $ | 8,347 | $ | 74,617 | $ | 33,052 | ||||||||
Interest on interest-bearing deposits in financial Institutions | 82 | — | 116 | 14 | ||||||||||||
Interest on investment securities | 2,173 | 1,846 | 8,239 | 6,335 | ||||||||||||
Interest on federal funds sold | 257 | 458 | 931 | 3,713 | ||||||||||||
Total interest income | 29,872 | 10,651 | 83,903 | 43,114 | ||||||||||||
Interest expense: | ||||||||||||||||
Interest expense on deposits | 3,636 | 2,340 | 11,463 | 9,860 | ||||||||||||
Interest expense on short-term borrowings | 23 | 81 | 148 | 383 | ||||||||||||
Interest expense on convertible debt | — | 11 | 23 | 46 | ||||||||||||
Interest expense on trust preferred securities | 677 | 310 | 2,455 | 962 | ||||||||||||
Total interest expense | 4,336 | 2,742 | 14,089 | 11,251 | ||||||||||||
Net interest income: | 25,536 | 7,909 | 69,814 | 31,863 | ||||||||||||
Provision for loan losses | — | — | — | 639 | ||||||||||||
Net interest income after provision for loan losses | 25,536 | 7,909 | 69,814 | 31,224 | ||||||||||||
Noninterest income: | ||||||||||||||||
Service charges and fees on deposit accounts | 2,190 | 875 | 6,080 | 2,560 | ||||||||||||
Merchant discount fees | 255 | 78 | 557 | 327 | ||||||||||||
Other commissions and fees | 1,171 | 464 | 2,150 | 1,367 | ||||||||||||
Gain (loss) on sale of loans | (578 | ) | 145 | (315 | ) | 444 | ||||||||||
Gain on sale of securities | 1,608 | — | 1,608 | — | ||||||||||||
Other income | 598 | 199 | 2,673 | 479 | ||||||||||||
Total noninterest income | 5,244 | 1,761 | 12,753 | 5,177 | ||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits | 9,775 | 3,526 | 26,740 | 12,930 | ||||||||||||
Occupancy | 2,442 | 1,048 | 6,441 | 3,293 | ||||||||||||
Furniture and equipment | 746 | 247 | 2,964 | 1,238 | ||||||||||||
Data processing | 1,386 | 510 | 3,707 | 1,740 | ||||||||||||
Other professional services | 914 | 201 | 2,862 | 1,322 | ||||||||||||
Business development | 282 | 161 | 1,044 | 665 | ||||||||||||
Communications | 962 | 305 | 2,197 | 931 | ||||||||||||
Stationary and supplies | 251 | 99 | 808 | 266 | ||||||||||||
Insurance and assessments | 364 | 157 | 1,153 | 826 | ||||||||||||
Cost of OREO | 435 | (5 | ) | 514 | 47 | |||||||||||
Goodwill amortization | — | — | — | 207 | ||||||||||||
Core deposit intangible amortization | 692 | — | 1,269 | — | ||||||||||||
Other | 1,945 | 1,109 | 4,739 | 2,450 | ||||||||||||
Total noninterest expense | 20,194 | 7,358 | 54,438 | 25,915 | ||||||||||||
Income before income taxes | 10,586 | 2,312 | 28,129 | 10,486 | ||||||||||||
Income taxes | 4,178 | 918 | 11,217 | 4,376 | ||||||||||||
Net income | $ | 6,408 | $ | 1,394 | $ | 16,912 | $ | 6,110 | ||||||||
Per share information: | ||||||||||||||||
Number of shares (weighted average) | ||||||||||||||||
Basic | 15,269.1 | 5,223.6 | 10,301.9 | 4,695.8 | ||||||||||||
Diluted | 15,773.3 | 5,479.4 | 10,691.7 | 4,958.2 | ||||||||||||
Income per share | ||||||||||||||||
Basic | $ | 0.42 | $ | 0.27 | $ | 1.64 | $ | 1.30 | ||||||||
Diluted | $ | 0.41 | $ | 0.25 | $ | 1.58 | $ | 1.23 |
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| 3 Months Ended December 31, | 12 Months Ended December 31, | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2002 | 2001 | 2002 | 2001 | ||||||||||
Net income per share information: | ||||||||||||||
Number of shares (weighted average, in thousands) | 15,269.1 | 5,223.6 | 10,301.9 | 4,695.8 | ||||||||||
Diluted shares (weighted average, in thousands) | 15,773.3 | 5,479.4 | 10,691.7 | 4,958.2 | ||||||||||
Basic income per share | $ | 0.42 | $ | 0.27 | $ | 1.64 | $ | 1.30 | ||||||
Diluted income per share | $ | 0.41 | $ | 0.25 | $ | 1.58 | $ | 1.23 | ||||||
Operating income per share information: | ||||||||||||||
Basic operating income per share | $ | 0.45 | $ | 0.27 | $ | 1.71 | $ | 1.35 | ||||||
Diluted operating income per share | $ | 0.43 | $ | 0.25 | $ | 1.65 | $ | 1.27 | ||||||
Profitability measures based on net income: | ||||||||||||||
Return on average assets | 1.16 | % | 0.71 | % | 1.14 | % | 0.92 | % | ||||||
Return on average equity | 8.1 | % | 15.1 | % | 9.7 | % | 16.3 | % | ||||||
Efficiency ratio | 65.6 | % | 76.1 | % | 65.9 | % | 70.0 | % | ||||||
Profitability measures based on operating income: | ||||||||||||||
Return on average assets | 1.24 | % | 0.71 | % | 1.19 | % | 0.95 | % | ||||||
Return on average equity | 8.6 | % | 15.1 | % | 10.1 | % | 16.9 | % | ||||||
Efficiency ratio | 63.4 | % | 76.1 | % | 64.4 | % | 69.4 | % | ||||||
Reconciliation of net income to operating income (in thousands): | ||||||||||||||
Net income | $ | 6,408 | $ | 1,394 | $ | 16,912 | $ | 6,110 | ||||||
Goodwill amortization | — | — | — | 207 | ||||||||||
Core deposit intangible amortization, net of tax | 401 | — | 736 | — | ||||||||||
Operating income | $ | 6,809 | $ | 1,394 | $ | 17,648 | $ | 6,317 | ||||||
Operating revenues (in thousands): | ||||||||||||||
Net interest income | $ | 25,536 | $ | 7,909 | $ | 69,814 | $ | 31,863 | ||||||
Noninterest income | 5,244 | 1,761 | 12,753 | 5,177 | ||||||||||
Operating revenues | $ | 30,780 | $ | 9,670 | $ | 82,567 | $ | 37,040 | ||||||
Adjustments to expenses (in thousands): | ||||||||||||||
Noninterest expense | $ | 20,194 | $ | 7,358 | $ | 54,438 | $ | 25,915 | ||||||
Goodwill amortization | — | — | — | (207 | ) | |||||||||
Core deposit intangible amortization | (692 | ) | — | (1,269 | ) | — | ||||||||
Operating expenses | $ | 19,502 | $ | 7,358 | $ | 53,169 | $ | 25,708 | ||||||
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UNAUDITED AVERAGE BALANCE SHEETS
| 3 Months Ended December 31, | 12 Months Ended December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2002 | 2001 | 2002 | 2001 | |||||||||||
| (In thousands) | ||||||||||||||
Average Assets: | |||||||||||||||
Loans, net of deferred fees and costs | $ | 1,517,734 | $ | 493,519 | $ | 1,023,699 | $ | 395,337 | |||||||
Investment securities | 267,741 | 134,019 | 200,280 | 107,277 | |||||||||||
Federal funds sold | 82,454 | 84,833 | 61,439 | 95,260 | |||||||||||
Interest-bearing deposits in financial institutions | 16,436 | 244 | 4,445 | 286 | |||||||||||
Average earning assets | 1,884,365 | 712,615 | 1,289,863 | 598,160 | |||||||||||
Other assets | 298,676 | 63,949 | 195,394 | 68,433 | |||||||||||
Average total assets | $ | 2,183,041 | $ | 776,564 | $ | 1,485,257 | $ | 666,593 | |||||||
Average Liabilities and Shareholders' Equity: | |||||||||||||||
Average Liabilities: | |||||||||||||||
Noninterest-bearing deposits | $ | 647,943 | $ | 261,971 | $ | 466,689 | $ | 239,395 | |||||||
Time deposits of $100,000 or more | 235,869 | 58,920 | 136,628 | 58,398 | |||||||||||
Interest-bearing deposits | 901,181 | 378,639 | 643,929 | 303,018 | |||||||||||
Average deposits | 1,784,993 | 699,530 | 1,247,246 | 600,811 | |||||||||||
Other interest-bearing liabilities | 45,645 | 24,371 | 38,458 | 17,297 | |||||||||||
Other liabilities | 38,431 | 16,035 | 24,416 | 11,059 | |||||||||||
Average liabilities | 1,869,069 | 739,936 | 1,310,120 | 629,167 | |||||||||||
Average equity | 313,972 | 36,628 | 175,137 | 37,426 | |||||||||||
Average liabilities and shareholders' equity | $ | 2,183,041 | $ | 776,564 | $ | 1,485,257 | $ | 666,593 | |||||||
Yield Analysis: | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Average earning assets | $ | 1,884,365 | $ | 712,615 | $ | 1,289,863 | $ | 598,160 | |||||||
Yield | 6.29 | % | 5.93 | % | 6.50 | % | 7.21 | % | |||||||
Average interest-bearing deposits | $ | 1,137,050 | $ | 437,559 | $ | 780,557 | $ | 361,416 | |||||||
Cost | 1.27 | % | 2.12 | % | 1.47 | % | 2.73 | % | |||||||
Average deposits | $ | 1,784,993 | $ | 699,530 | $ | 1,247,246 | $ | 600,811 | |||||||
Cost | 0.81 | % | 1.33 | % | 0.92 | % | 1.64 | % | |||||||
Average interest-bearing liabilities | $ | 1,182,695 | $ | 461,930 | $ | 819,015 | $ | 378,713 | |||||||
Cost | 1.45 | % | 2.36 | % | 1.72 | % | 2.97 | % | |||||||
Interest spread | 4.84 | % | 3.57 | % | 4.78 | % | 4.24 | % | |||||||
Net interest margin | 5.38 | % | 4.40 | % | 5.41 | % | 5.33 | % | |||||||
Average interest sensitive liabilities | $ | 1,830,638 | $ | 723,901 | $ | 1,285,704 | $ | 618,108 | |||||||
Cost | 0.94 | % | 1.50 | % | 1.10 | % | 1.82 | % |
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CREDIT QUALITY MEASURES
| As of or for the Periods Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12 Months 12/31/02 | 9 Months 9/30/02 | 6 Months 6/30/02 | 3 Months 3/31/02 | Year * 12/31/01 | 9 Months 9/30/01 | ||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
Nonaccrual loans and leases | $ | 10,216 | $ | 10,254 | $ | 6,237 | $ | 6,205 | $ | 4,672 | $ | 6,103 | ||||||||
Other real estate owned | 3,117 | 4,751 | 2,797 | 2,747 | 3,075 | 309 | ||||||||||||||
Nonperforming assets | 13,333 | 15,005 | 9,034 | 8,952 | 7,747 | 6,412 | ||||||||||||||
Loans past due 90 days or more and still accruing | $ | — | $ | — | $ | — | $ | 112 | $ | — | $ | — | ||||||||
Impaired loans, gross | 10,216 | 10,254 | 6,237 | 6,205 | 4,672 | 6,103 | ||||||||||||||
Allocated allowance for loan losses | (3,027 | ) | (2,250 | ) | (910 | ) | (783 | ) | (1,256 | ) | (1,861 | ) | ||||||||
Net investment in impaired loans | 7,189 | 8,004 | 5,327 | 5,422 | 3,416 | 4,242 | ||||||||||||||
Charged-off loans year-to-date | 4,790 | 3,478 | 2,220 | 1,039 | 2,666 | 2,065 | ||||||||||||||
Recoveries year-to-date | (3,198 | ) | (1,616 | ) | (1,181 | ) | (429 | ) | (1,203 | ) | (710 | ) | ||||||||
Net charge-offs (recoveries) (normalized) * | $ | 1,592 | $ | 1,862 | $ | 1,039 | $ | 610 | $ | 1,463 | $ | 1,355 | ||||||||
Allowance for loan losses to loans, net of deferred fees and costs | 1.71 | % | 1.59 | % | 1.49 | % | 1.70 | % | 2.23 | % | 2.63 | % | ||||||||
Allowance for loan losses to nonaccrual loans and leases | 237.8 | % | 234.3 | % | 210.1 | % | 218.6 | % | 239.9 | % | 167.9 | % | ||||||||
Allowance for loan losses to nonperforming assets | 182.2 | % | 160.1 | % | 145.4 | % | 149.6 | % | 144.7 | % | 159.8 | % | ||||||||
Nonperforming assets to loans and OREO | 0.93 | % | 0.99 | % | 1.02 | % | 1.12 | % | 1.53 | % | 1.65 | % | ||||||||
Annualized net charge offs to average loans | 0.10 | % | 0.29 | % | 0.28 | % | 0.38 | % | 0.37 | % | 0.49 | % | ||||||||
Nonaccrual loans to loans, net of deferred fees and costs | 0.72 | % | 0.68 | % | 0.71 | % | 0.78 | % | 0.93 | % | 1.57 | % |
- *
- Normalized net charge-offs (recoveries) excludes $4,905,000 of First Professional loans charged-off in a one-time charge associated with the First Professional acquisition in the first quarter of 2001.
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FIRST COMMUNITY BANCORP ANNOUNCES EARNINGS FOR THE FOURTH QUARTER OF 2002
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS