FPB Bancorp (FPBI) 10QSB 2005 Q1 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

x Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2005

¨ Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from            to            

Commission File Number 000-33351

FPB BANCORP, INC.

(Exact Name of Small Business Issuer as Specified in Its Charter)

Florida	65-1147861
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1301 SE Port St. Lucie Boulevard

Port St. Lucie, Florida 34952

(Address of Principal Executive Offices)

(772) 398-1388

(Issuer’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    YES  x    NO  ¨

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

Common stock, par value $.01 per share	828,938 shares
(class)	Outstanding at May 13, 2005

Transitional Small Business Format (check one):    YES  ¨    NO  x

FPB BANCORP, INC. AND SUBSIDIARY

INDEX

			Page
PART I.FINANCIAL INFORMATION
	Item 1.Financial Statements
		Condensed Consolidated Balance Sheets - March 31, 2005 (unaudited) and December 31, 2004	2
		Condensed Consolidated Statements of Operations - Three Months ended March 31, 2005 and 2004 (unaudited)	3
		Condensed Consolidated Statements of Stockholders’ Equity - Three Months ended March 31, 2005 and 2004 (unaudited)	4
		Condensed Consolidated Statements of Cash Flows - Three Months ended March 31, 2005 and 2004 (unaudited)	5
		Notes to Condensed Consolidated Financial Statements (unaudited)	6-8
		Review By Independent Registered Public Accounting Firm	9
		Report of Independent Registered Public Accounting Firm	10
	Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations		11-14
	Item 3.Controls and Procedures		15
PART II.OTHER INFORMATION
	Item 1.Legal Proceedings		15
	Item 6.Exhibits		15
SIGNATURES			16

1

FPB BANCORP, INC. AND SUBSIDIARY

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

	March 31, 2005			December 31, 2004
	(unaudited)
Assets
Cash and due from banks	$	2,462		2,048
Federal funds sold		10,522		7,656
Interest-bearing deposits with banks		2		55
Total cash and cash equivalents		12,986		9,759
Securities available for sale		6,674		8,337
Securities held to maturity		3,029		3,034
Loans, net of allowance for loan losses of $1,168 and $1,097		77,783		68,794
Premises and equipment, net		3,791		3,668
Federal Home Loan Bank stock, at cost		302		253
Accrued interest receivable		344		306
Deferred income taxes		143		214
Other assets		270		232
Total assets	$	105,322		94,597
Liabilities and Stockholders’ Equity
Liabilities:
Noninterest-bearing demand deposits		24,332		20,568
Savings, NOW and money-market deposits		36,243		30,278
Time deposits		32,714		31,090
Total deposits		93,289		81,936
Official checks		1,664		2,455
Federal Home Loan Bank advance		2,500		2,500
Other liabilities		237		286
Total liabilities		97,690		87,177
Stockholders’ equity:
Preferred stock, $.01 par value; 1,000,000 shares authorized, no shares issued or outstanding		—		—
Common stock, $.01 par value; 5,000,000 shares authorized, 828,938 and 819,120 shares issued and outstanding		8		8
Additional paid-in capital		8,026		7,927
Accumulated deficit		(363	)	(503	)
Accumulated other comprehensive loss		(39	)	(12	)
Total stockholders’ equity		7,632		7,420
Total liabilities and stockholders’ equity	$	105,322		94,597

See Accompanying Notes to Condensed Consolidated Financial Statements.

2

FPB BANCORP, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except share amounts)

	Three Months Ended March 31,
	2005		2004
Interest income:
Loans	$	1,345	828
Securities		79	89
Other		48	13
Total interest income		1,472	930
Interest expense:
Deposits		360	236
Federal Home Loan Bank advance		13	—
Total interest expense		373	236
Net interest income		1,099	694
Provision for loan losses		70	125
Net interest income after provision for loan losses		1,029	569
Noninterest income:
Service charges and fees on deposit accounts		62	73
Loan brokerage fees		8	15
Gain on sale of loans held for sale		141	29
Gain on sale of securities available for sale		—	20
Other fees		2	10
Total noninterest income		213	147
Noninterest expenses:
Salaries and employee benefits		479	344
Occupancy and equipment		145	107
Advertising		85	62
Professional fees		31	54
Data processing		68	63
Supplies		28	29
Other		179	156
Total noninterest expenses		1,015	815
Earnings (loss) before income taxes		227	(99	)
Income taxes		87	(35	)
Net earnings (loss)	$	140	(64	)
Earnings (loss) per share, basic and diluted	$	.17	(.08	)
Weighted-average number of shares, basic and diluted		821,574	818,120
Dividends per share	$	—	—

See Accompanying Notes to Condensed Consolidated Financial Statements.

3

FPB BANCORP, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended March 31, 2005 and 2004

(Dollars in thousands)

	Common Stock				Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares		Amount
Balance at December 31, 2003	818,120		$	8	7,918		(567	)	13		7,372
Comprehensive income (loss):
Net loss for the three months ended March 31, 2004 (unaudited)	—			—	—		(64	)	—		(64	)
Net change in unrealized gain on securities available for sale, net of tax of $2 (unaudited)	—			—	—		—		4		4
Comprehensive loss (unaudited)											(60	)
Issuance of common stock from exercise of warrants (unaudited)	8,000			—	80		—		—		80
Repurchase and retirement of common stock (unaudited)	(8,000	)		—	(88	)	—		—		(88	)
Balance at March 31, 2004 (unaudited)	818,120		$	8	7,910		(631	)	17		7,304
Balance at December 31, 2004	819,120			8	7,927		(503	)	(12	)	7,420
Comprehensive income:
Net earnings for the three months ended March 31, 2005 (unaudited)	—			—	—		140		—		140
Net change in unrealized loss on securities available for sale, net of tax of $16 (unaudited)	—			—	—		—		(27	)	(27	)
Comprehensive income (unaudited)											113
Proceeds from exercise of common stock options (unaudited)	9,818			—	99		—		—		99
Balance at March 31, 2005 (unaudited)	828,938		$	8	8,026		(363	)	(39	)	7,632

See Accompanying Notes to Condensed Consolidated Financial Statements.

4

FPB BANCORP, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Three Months Ended March 31,
	2005			2004
Cash flows from operating activities:
Net earnings (loss)	$	140		(64	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Depreciation and amortization		67		39
Provision for loan losses		70		125
Deferred income taxes (benefit)		87		(35	)
Amortization of loan fees, net		(13	)	(9	)
Net amortization of premiums and discounts on securities		(9	)	(6	)
Gain on sale of securities available for sale		—		(20	)
Gain on sale of loans held for sale		(141	)	(29	)
Proceeds from sale of loans held for sale		2,451		804
Originations of loans held for sale		(2,310	)	(775	)
(Increase) decrease in accrued interest receivable		(38	)	5
Increase in other assets		(38	)	(19	)
Decrease in official checks and other liabilities		(840	)	(760	)
Net cash used in operating activities		(574	)	(744	)
Cash flows from investing activities:
Maturities of securities available for sale		1,500		—
Principal payments on securities available for sale		128		195
Proceeds from sale of securities available for sale		—		2,020
Principal payments on securities held to maturity		6		17
Net increase in loans		(9,046	)	(4,120	)
Purchase of premises and equipment		(190	)	(547	)
(Purchase) redemption of Federal Home Loan Bank stock		(49	)	12
Net cash used in investing activities		(7,651	)	(2,423	)
Cash flows from financing activities:
Net increase in deposits		11,353		6,899
Proceeds from exercise of common stock options		99		—
Issuance of common stock from exercise of warrants		—		80
Repurchase and retirement of common stock		—		(88	)
Net cash provided by financing activities		11,452		6,891
Net increase in cash and cash equivalents		3,227		3,724
Cash and cash equivalents at beginning of period		9,759		7,218
Cash and cash equivalents at end of period	$	12,986		10,942
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	351		240
Income taxes	$	—		—
Noncash transaction-
Accumulated other comprehensive income (loss), net change in unrealized gain (loss) on securities available for sale, net of taxes	$	(27	)	4

See Accompanying Notes to Condensed Consolidated Financial Statements.

5

FPB BANCORP, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (unaudited)

(1) General. FPB Bancorp, Inc. (the “Holding Company”) is a one-bank holding company and owns 100% of the outstanding common stock of First Peoples Bank (the “Bank”), a Florida-chartered commercial bank (collectively, the “Company”). The Holding Company’s only business activity is the operation of the Bank. The Bank’s deposits are insured, up to the limit of the law, by the Federal Deposit Insurance Corporation. The Bank offers a variety of community banking services to individual and corporate customers through its three banking offices located in Port St. Lucie, Fort Pierce and Stuart, Florida.

In the opinion of management, the accompanying condensed consolidated financial statements of the Company contain all adjustments (consisting principally of normal recurring accruals) necessary to present fairly the financial position at March 31, 2005, and the results of operations and cash flows for the three-month periods ended March 31, 2005 and 2004. The results of operations for the three months ended March 31, 2005, are not necessarily indicative of the results to be expected for the full year

(2) Loan Impairment and Credit Losses. Loans identified as impaired are as follows (in thousands):

	Three Months Ended March 31,
	2005		2004
Gross loans with related allowance for losses recorded, at end of period	$	—	1,422
Less: Allowance on these loans		—	78
Net investment in impaired loans, at end of period	$	—	1,344
Average investment in impaired loans	$	376	1,438
Interest income recognized on impaired loans	$	49	—
Interest income received on impaired loans	$	49	—

The activity in the allowance for loan losses was as follows (in thousands):

	Three Months Ended March 31,
	2005		2004
Balance at beginning of period	$	1,097	852
Provision for loan losses		70	125
Recoveries, net of (charge-offs)		1	(9	)
Balance at end of period	$	1,168	968

(continued)

6

FPB BANCORP, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (unaudited), Continued

(2) Loan Impairment and Credit Losses, Continued. Nonaccrual and past due loans were as follows (in thousands):

	At March 31, 2005		At December 31, 2004
Nonaccrual loans	$	30	496
Past due ninety days or more, but still accruing		—	—
	$	30	496

(3) Regulatory Capital.The Bank is required to maintain certain minimum regulatory capital requirements. The following is a summary at March 31, 2005 of the regulatory capital requirements and the Bank’s capital on a percentage basis:

	Percentage of the Bank		Regulatory Requirement
Tier I capital to total average assets	7.34	%	4.00	%
Tier I capital to risk-weighted assets	10.37	%	4.00	%
Total capital to risk-weighted assets	11.62	%	8.00	%

(4) Earnings (Loss) Per Share. Basic and diluted earnings (loss) per share are computed on the basis of the weighted-average number of shares of common stock outstanding. Outstanding stock options and warrants are not dilutive.

(5) Stock Options. The Company established an Incentive Stock Option Plan for officers and employees of the Company. The Plan as amended provides for 122,666 shares of common stock to be available for grant. The exercise price of the stock options is the greater of $10 or the fair market value of the common stock on the date of grant. The options vest 33.3% during the second and third year, respectively, after grant and are fully exercisable during the fourth year after the grant date. The options expire ten years from the date of grant. At March 31, 2005, 13,664 shares remain available for grant. A summary of stock option follows (dollars in thousands, except share amounts):

	Share Number of Shares		Range of Per Average Option Price	Weighted- Aggregate Per Share Price	Option Price
Outstanding at December 31, 2004	109,002		$10.00-10.75	10.14	1,105
Exercised	(9,818	)	10.50	10.50	(103	)
Outstanding at March 31, 2005	99,184		$10.00-10.75	10.10	1,002

(continued)

7

FPB BANCORP, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (unaudited), Continued

(5) Stock Options, Continued. Statement of Financial Accounting Standards (SFAS) No. 123,Accounting for Stock-Based Compensation, (as amended by SFAS No. 148,Accounting for Stock-Based Compensation Transition and Disclosure) (collectively “FASB No. 123”) encourages all entities to adopt a fair value based method of accounting for employee stock compensation plans, whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. However, it also allows an entity to continue to measure compensation cost for those plans using the intrinsic value based method of accounting prescribed by Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees (“APB No. 25”), whereby compensation cost is the excess, if any, of the quoted market price of the stock at the grant date (or other measurement date) over the amount an employee must pay to acquire the stock. Stock options issued under the Company’s stock option plans have no intrinsic value at the grant date, and under APB No. 25 no compensation cost is recognized for them. The Company has elected to continue with the accounting methodology in APB No. 25.

No stock-based employee compensation cost is reflected in net earnings (loss), as all options granted under those plans had an exercise price which approximated the market value of the underlying common stock on the date of grant. For purposes of proforma disclosures, the estimated fair value is included in expense in the period vesting occurs. The following table illustrates the effect on net earnings (loss) and earnings (loss) per share if the Company had applied the fair value recognition provisions of FASB No. 123 to stock-based employee compensation (dollars in thousands, except per share amounts).

	Three Months Ended March 31,
	2005			2004
Net earnings (loss) as reported	$	140		(64	)
Deduct: Total stock-based employee compensation determined under the fair value based method for all awards, net of related tax effect		(4	)	(6	)
Proforma net earnings (loss)	$	136		(70	)
Earnings (loss) per share:
Basic and diluted, as reported	$	.17		(.08	)
Basic and diluted, proforma	$	.17		(.09	)

No stock options were granted during the three months ended March 31, 2005 or 2004.

8

FPB BANCORP, INC. AND SUBSIDIARY

Review by Independent Registered Public Accounting Firm

Hacker, Johnson & Smith PA, the Company’s independent registered public accounting firm, have made a limited review of the financial data as of March 31, 2005, and for the three-month periods ended March 31, 2005 and 2004 presented in this document, in accordance with the standards established by the Public Company Accounting Oversight Board.

Their report furnished pursuant to Article 10 of Regulation S-X is included herein.

9

Report of Independent Registered Public Accounting Firm

FPB Bancorp, Inc.

Port St. Lucie, Florida:

We have reviewed the accompanying condensed consolidated balance sheet of FPB Bancorp, Inc. and Subsidiary (the “Company”) as of March 31, 2005, and the related condensed consolidated statements of operations, stockholders equity and cash flows for the three-month periods ended March 31, 2005 and 2004. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim condensed consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of the Company as of December 31, 2004, and the related consolidated statements of earnings, stockholders’ equity and cash flows for the year then ended (not presented herein); and in our report dated March 1, 2005, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2004, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Hacker, Johnson & Smith PA

HACKER, JOHNSON & SMITH PA

Fort Lauderdale, Florida

April 27, 2005

10

FPB BANCORP, INC. AND SUBSIDIARY

Item 2. Management’s Discussion and Analysis

of Financial Condition and Results of Operations

General

FPB Bancorp, Inc. (the “Holding Company”) is a one-bank holding company and owns 100% of the outstanding common stock of First Peoples Bank (the “Bank”), a Florida-chartered commercial bank (collectively, the “Company”). The Holding Company’s only business activity is the operation of the Bank. The Bank’s deposits are insured, up to the limit of the law, by the Federal Deposit Insurance Corporation. The Bank offers a variety of community banking services to individual and corporate customers through its three banking offices located in Port St. Lucie, Fort Pierce and Stuart, Florida.

Liquidity and Capital Resources

The Company’s primary sources of cash during the three months ended March 31, 2005 were from net deposit inflow of approximately $11.4 million. Cash was used primarily for net loan originations of $9.0 million. At March 31, 2005, the Company had time deposits of $48.3 million that mature in one year or less. Management believes that, if so desired, it can adjust the rates on time deposits to retain or attract deposits in a changing interest-rate environment.

The following table shows selected information for the periods ended or at the dates indicated:

	Three Months Ended March 31, 2005		Year Ended December 31, 2004		Three Months Ended March 31, 2004
Average equity as a percentage of average assets	7.54	%	7.35	%	10.09	%
Equity to total assets at end of period	7.25	%	7.84	%	9.59	%
Return on average assets (1)	.56	%	.13	%	(.35	)%
Return on average equity (1)	7.44	%	1.78	%	(3.48	)%
Noninterest expenses to average assets (1)	4.07	%	3.67	%	4.47	%
Nonperforming loans to total assets at end of period	.03	%	.52	%	1.95	%

(1) Annualized for the three months ended March 31, 2005 and 2004.

11

FPB BANCORP, INC. AND SUBSIDIARY

Item 2. Management’s Discussion and Analysis

of Financial Condition and Results of Operations, Continued

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are unfunded loan commitments, available lines of credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the condensed consolidated balance sheet. The contract amounts of those instruments reflect the extent of the Company’s involvement in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for unfunded loan commitments, available lines of credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed-expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counter party.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Company generally holds collateral supporting these commitments and management does not anticipate any potential losses if these letters of credit are funded.

A summary of the amounts of the Company’s financial instruments, with off-balance sheet risk at March 31, 2005, follows (in thousands):

	Contract Amount
Unfunded loan commitments	$	10,906
Available lines of credit	$	12,199
Standby letters of credit	$	473

Management believes that the Company has adequate resources to fund all of its commitments and that substantially all its existing commitments will be funded within the next twelve months.

12

FPB BANCORP, INC. AND SUBSIDIARY

Results of Operations

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest-rate spread; (v) net interest margin; and (vi) ratio of average interest-earning assets to average interest-bearing liabilities.

	Three Months Ended March 31,
	2005						2004
	Average Balance		Interest and Dividends		Average Yield/ Rate		Average Balance		Interest and Dividends		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Loans	$	75,390		1,345	7.14	%	$	52,019		828	6.37	%
Securities		10,337		79	3.06			10,785		89	3.30
Other (1)		8,380		48	2.29			2,557		13	2.03
Total interest-earning assets		94,107		1,472	6.26			65,361		930	5.69
Noninterest-earning assets		5,688						7,504
Total assets	$	99,795					$	72,865
Interest-bearing liabilities:
Savings, NOW and money-market deposit accounts		34,615		139	1.61			24,557		76	1.24
Time deposits		31,972		221	2.76			24,595		160	2.60
Borrowings		2,500		13	2.08			—		—
Total interest-bearing liabilities		69,087		373	2.16			49,152		236	1.92
Demand deposits		21,439						15,286
Noninterest-bearing liabilities		1,743						1,072
Stockholders’ equity		7,526						7,355
Total liabilities and stockholders’ equity	$	99,795					$	72,865
Net interest income			$	1,099					$	694
Interest-rate spread (2)					4.10	%					3.77	%
Net interest margin (3)					4.67	%					4.25	%
Ratio of average interest-earning assets to average interest-bearing liabilities		1.36						1.33

(1) Includes federal funds sold, dividends from Federal Home Loan Bank stock and interest-bearing deposits with banks.

(2) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average rate of interest-bearing liabilities.

(3) Net interest margin is net interest income divided by average interest-earning assets.

13

FPB BANCORP, INC. AND SUBSIDIARY

Comparison of the Three-Month Periods Ended March 31, 2005 and 2004

General. Net earnings for the three months ended March 31, 2005, were $140,000 or $.17 per basic and diluted share compared to a net loss of $(64,000) or ($.08) per basic and diluted share for the period ended March 31, 2004. This increase in the Company’s net operating results was primarily due to an increase in net interest income and noninterest income, which was partially offset by an increase in noninterest expenses and the provision for income taxes.

Interest Income. Interest income increased to $1.5 million for the three months ended March 31, 2005 from $930,000 for the three months ended March 31, 2004. Interest income on loans increased to $1.3 million due primarily to an increase in the average loan portfolio balance for the three months ended March 31, 2005, and an increase in the average yield earned in 2005. Interest on securities decreased to $79,000 due primarily to a decrease in the average balance and a decrease in the average yield earned during the three months ended March 31, 2005.

Interest Expense.Interest expense increased to $373,000 for the three months ended March 31, 2005, from $236,000 for the three months ended March 31, 2004. Interest expense increased primarily due to an increase in the average balance of deposits and an increase in the average rate paid on deposits during 2005.

Provision for Loan Losses. The provision for loan losses is charged to operations to bring the total allowance to a level deemed appropriate by management and is based upon historical experience, the volume and type of lending conducted by the Company, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to the Company’s market areas, and other factors related to the estimated collectibility of the Company’s loan portfolio. The provision for the three months ended March 31, 2005, was $70,000 compared to $125,000 for the same period in 2004. The decrease in the provision was due to a decrease in the specific allowances established with respect to loans that were impaired as of December 31, 2004. Management believes the balance in the allowance for loan losses of $1.2 million at March 31, 2005 is adequate.

Noninterest Income. Total noninterest income increased to $213,000 for the three months ended March 31, 2005, from $147,000 for the three months ended March 31, 2004 primarily as a result of an increase in gains on loans held for sale.

Noninterest Expenses. Total noninterest expenses increased to $1.0 million for the three months ended March 31, 2005 from $815,000 for the three months ended March 31, 2004, primarily due to an increase in employee compensation and benefits of $135,000, an increase in occupancy and equipment of $38,000 and an increase in advertising expense of $23,000 all due to the continued growth of the Company.

Income Taxes. The income tax provision for the three months ended March 31, 2005, was $87,000 (an effective rate of 38.3%) compared to an income tax benefit of $35,000 (an effective rate of 35.4%) for the three months ended March 31, 2004.

14

FPB BANCORP, INC. AND SUBSIDIARY

Item 3. Controls and Procedures

a. Evaluation of Disclosure Controls and Procedures. The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the filing date of this report, the chief executive and chief financial officers of the Company concluded that the Company’s disclosure controls and procedures were adequate.

b. Changes in Internal Controls. The Company made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the Chief Executive and Chief Financial officers.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceeding to which the Company is a party or to which any of their property is subject.

Item 6. Exhibits

(a)Exhibits. The following exhibits are filed with or incorporated by reference into this report. The exhibits marked with an asterisk (*) were previously filed as a part of the Company’s Registration Statement on Form SB-1, filed with the Federal Deposit Insurance Corporation on April 30, 2000, and those marked with a double asterisk (**) were filed with the Company’s 2003 Proxy Statement filed with the Security and Exchange Commission.

Exhibit No.	Description of Exhibit
*       3.1	Articles of Incorporation
*       3.2	Bylaws
*       4.1	Specimen copy of certificate evidencing shares of the Company’s common capital stock, $0.01 par value
*       4.2	First Peoples Bank Stock Option Plan dated January 14, 1999
*       4.3	Warrant Agreement
*       4.4	Non-Qualified Stock Option Agreement
**     4.5	Amendment to First Peoples Bank Stock Option Plan
*       10.1	First Peoples Bank Qualified 401(k) Profit Sharing Plan, dated May 1, 1999
*       10.2	Employment Agreement for David W. Skiles
31.1	Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
31.2	Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002

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FPB BANCORP, INC. AND SUBSIDIARY

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FPB BANCORP, INC.
	(Registrant)
Date: May 13, 2005	By:	/s/ David W. Skiles
		David W. Skiles, President and Chief Executive Officer
Date: May 13, 2005	By:	/s/ Nancy E. Aumack
		Nancy E. Aumack, Senior Vice President and
		Chief Financial Officer

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