Exhibit 99.1
FCB BANCORP
FCB Bancorp Posts Record Results and Completes Acquisition
Camarillo, California – October 28, 2005 – FCB Bancorp (OTCBB: FCBA; formerly First California Bank – OTCBB: FCAA) announced today record third quarter earnings of $762,000 an increase of 28 percent from the same quarter a year ago and 21 percent higher than last quarter. For the first nine months of 2005, net income was $1,968,000 up 12 percent from the same period a year ago.
FCB Bancorp is a new bank holding company formed by the shareholders of First California Bank. First California Bank shareholders’ stock was converted, without the recognition of gain or loss for tax purposes, into stock of FCB Bancorp on a share-for share basis. Shareholders need not exchange stock certificates although shareholders may do so, if desired. First California Bank became a wholly-owned subsidiary of FCB Bancorp on September 30, 2005.
FCB Bancorp also completed the acquisition of South Coast Bancorp, Inc. and its wholly owned subsidiary, South Coast Commercial Bank, on September 30, 2005 for cash consideration of $36 million. In connection with this acquisition, FCB Bancorp issued 1,115,000 shares of new common stock to accredited investors at $19.75 per share. Net proceeds from this offering were $20.7 million. In addition, FCB Bancorp issued $10.0 million of junior subordinated debentures [commonly referred to as ‘trust preferred
securities’]. Substantially all of the proceeds from this issuance were used to fund the acquisition and pay expenses incurred with both the holding company formation and the acquisition. The acquisition was accounted for using the purchase method of accounting and, as a result, the September 30, 2005 balance sheet information includes the fair value of the assets acquired and the liabilities assumed from South Coast Bancorp, Inc. Revenues, expenses and the resulting income for 2005 and prior periods, however, reflect FCB Bancorp only.
Net income
(in thousands, except per share) | Third quarter | Nine months ended Sep 30, | ||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Net income | $ | 762 | $ | 597 | $ | 1,968 | $ | 1,763 | ||||||||
Basic earnings per share | $ | 0.35 | $ | 0.28 | $ | 0.91 | $ | 0.86 | ||||||||
Diluted earnings per share | $ | 0.35 | $ | 0.27 | $ | 0.90 | $ | 0.83 | ||||||||
Basic weighted average shares | 2,175 | 2,163 | 2,167 | 2,052 | ||||||||||||
Diluted weighted average shares | 2,190 | 2,175 | 2,189 | 2,119 |
Net income for the third quarter of 2005 was $762,000 or $0.35 per diluted share compared with $597,000 or $0.27 per diluted share for the third quarter of 2004. For the first nine months of 2005, net income was $1,968,000 or $0.90 per diluted share compared with $1,763,000 or $0.83 per diluted share for the same period last year. The earnings per share data for 2005 reflect the increase in outstanding weighted average shares that resulted from the issuance of 1,115,000 new shares at the end of the third quarter of 2005.
Net interest income
(dollars in thousands) | Third quarter | Nine months ended Sep 30, | ||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Net interest income | $ | 3,567 | $ | 2,882 | $ | 10,028 | $ | 8,719 | ||||||||
Net interest margin (tax equivalent) | 5.09 | % | 4.48 | % | 4.95 | % | 4.79 | % | ||||||||
Average interest earning assets | $ | 278,443 | $ | 258,553 | $ | 270,780 | $ | 242,461 | ||||||||
Average interest bearing funds | $ | 179,519 | $ | 133,936 | $ | 172,969 | $ | 132,676 |
Net interest income increased to $3.6 million for the third quarter of 2005, up 24 percent from $2.9 million for the third quarter of 2004. Net interest income for the first nine months of 2005 was $10.0 million and increased 15 percent from $8.7 million posted for the same period last year. The net interest margin on a tax equivalent basis for the third quarter of 2005 was 5.09 percent up from 5.02 percent for the second quarter and 4.84 percent for the first quarter of 2005. The increase in net interest margin each quarter since the third quarter of 2004 reflects the asset-sensitive nature of the Bank’s balance sheet. The Bank should continue to experience an increase in net interest margin as the prime rate increases.
Noninterest income and noninterest expense
(dollars in thousands) | Third quarter | Nine months ended Sep 30, | ||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Service charges, fees & other income | $ | 439 | $ | 414 | $ | 1,212 | $ | 1,197 | ||||||||
Loan commissions & sales | 69 | 83 | 237 | 172 | ||||||||||||
Gains(losses) on sales of securities | — | 12 | 2 | 24 | ||||||||||||
Noninterest income | $ | 508 | $ | 509 | $ | 1,451 | $ | 1,393 | ||||||||
* * * | ||||||||||||||||
Salaries and employee benefits | $ | 1,522 | $ | 1,374 | $ | 4,541 | $ | 4,074 | ||||||||
Premises and equipment | 445 | 334 | 1,220 | 927 | ||||||||||||
Other expenses | 760 | 673 | 2,182 | 2,086 | ||||||||||||
Noninterest expense | $ | 2,727 | $ | 2,381 | $ | 7,943 | $ | 7,087 | ||||||||
Efficiency ratio | 66.93 | % | 70.46 | % | 69.20 | % | 70.24 | % |
Service charges, fees and other income for the third quarter of 2005 totaled $439,000 compared with $414,000 for the third quarter of 2004. Loan commissions and sales were $69,000 for the third quarter of 2005 and $83,000 for the third quarter of 2004. For the
nine months of 2005, noninterest income, excluding securities transactions, was up 6 percent on higher levels of loan commissions and sales.
Operating expenses for the third quarter of 2005 were $2.7 million up from $2.4 million for the third quarter of 2004. The increase in operating expenses from a year ago reflects principally the increase in costs stemming from the new Simi Valley branch that opened in January 2005, the expansion of our Westlake Village office in the fourth quarter of 2004 and our move into a new operations center in the fourth quarter of 2004. Notwithstanding the increase in operating expenses, the efficiency ratio improved to 66.93 percent for the third quarter of 2005 from 70.46 percent for the same period a year ago. The improvement reflects higher net interest revenue from the growth in our portfolio of loans and the general increase in interest rates as well as our ability to generate low-cost core deposits from an expanding branch network.
Loans and deposits
(dollars in thousands) | As of Sep 30, | As of Sep 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
Commercial real estate | $ | 224,383 | $ | 92,351 | Checking | $ | 90,782 | $ | 81,377 | |||||||||
Commercial loans | 56,271 | 56,438 | Interest checking | 21,793 | 19,043 | |||||||||||||
Construction loans | 23,004 | 8,175 | Savings | 24,395 | 11,975 | |||||||||||||
Home equity loans/lines | 7,482 | 2,036 | Money market | 61,094 | 44,398 | |||||||||||||
Home mortgage | 10,696 | 11,950 | Time deposits under $100,000 | 88,885 | 21,825 | |||||||||||||
Installment and credit card | 4,315 | 2,593 | Core deposits | 286,949 | 178,618 | |||||||||||||
Total loans | $ | 326,151 | $ | 173,543 | Time deposits $100,000 or more | 74,239 | 30,260 | |||||||||||
Total deposits | $ | 361,188 | $ | 208,878 | ||||||||||||||
Loans and deposits at September 30, 2005 include the combined balances of FCB Bancorp and South Coast Bancorp, Inc. Loans ended the third quarter of 2005 at $326.2 million, up from $173.5 million at the end of the same period a year ago. Before the business combination, loans increased 19 percent from a year ago. Deposits ended the
third quarter at $361.2 million, up from $208.9 at September 30, 2004. Before the business combination, deposits increased 12 percent from the end of the year ago period.
Allowance for loan losses and asset quality
(dollars in thousands) | Third quarter | Nine months ended Sep 30, | ||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Beginning balance | $ | 2,593 | $ | 2,533 | $ | 2,346 | $ | 2,325 | ||||||||
Balance acquired in purchase | 1,184 | — | 1,184 | — | ||||||||||||
Provision for loan losses | 122 | 104 | 366 | 313 | ||||||||||||
Loans charged-off | — | (50 | ) | (74 | ) | (86 | ) | |||||||||
Recoveries on loans charged-off | 96 | (22 | ) | 172 | 13 | |||||||||||
Ending balance | $ | 3,995 | $ | 2,565 | $ | 3,995 | $ | 2,565 | ||||||||
* * * | ||||||||||||||||
Allowance to loans | 1.22 | % | 1.48 | % | ||||||||||||
* * * | ||||||||||||||||
Accruing loans past due 90 days or more | $ | — | $ | 392 | ||||||||||||
Nonaccrual loans | $ | — | $ | 2,376 | ||||||||||||
Nonaccrual loans to loans | — | 1.37 | % |
At September 30, 2005 the allowance for loan losses was $4.0 million and the ratio of the allowance to loans was 1.22 percent. There were no nonaccrual loans at September 30, 2005. The one nonaccrual loan reported last quarter, for which there have been no charge-offs, has been returned to accruing status.
Capital and selected ratios
The ratio of shareholders’ equity to assets at September 30, 2005, which reflects the effects of the acquisition was 9.62 percent compared with 8.21 percent at the end of the year ago period. Tangible equity to tangible assets at September 30, 2005 was 6.16 percent compared with 8.21 percent a year ago. Book value per common share at September 30, 2005 increased to $13.72 at September 30, 2005 from $10.18 at September 30, 2004. The return on average assets and the return on average common equity for the third quarter of 2005 were 1.01 percent and 12.35 percent, respectively. The return on average assets and the return on average common equity for the first nine months of 2005 were 0.90 percent and 11.05 percent, respectively.
Pro forma financial information
The pro forma combined income statement information has been presented as if the merger, common stock issuance and trust preferred issuance had occurred at the beginning of the year. The pro forma income statement information include estimates and assumptions that were made solely for purposes of developing this pro forma information and are not necessarily an indication of the results that would have been achieved had the merger been consummated at the first of the year or that may be achieved in the future.
(in thousands, except per share) | 1Q2005 | 2Q2005 | 3Q2005 | 9 Mths 2005 | ||||||||||||
Net income as reported | $ | 577 | $ | 629 | $ | 762 | $ | 1,968 | ||||||||
Pro forma combined net income | $ | 884 | $ | 1,018 | $ | 1,196 | $ | 3,097 | ||||||||
Earnings per share as reported: | ||||||||||||||||
Basic | $ | 0.27 | $ | 0.29 | $ | 0.35 | $ | 0.91 | ||||||||
Diluted | $ | 0.26 | $ | 0.29 | $ | 0.35 | $ | 0.90 | ||||||||
Pro forma combined earnings per share: | ||||||||||||||||
Basic | $ | 0.27 | $ | 0.31 | $ | 0.36 | $ | 0.94 | ||||||||
Diluted | $ | 0.27 | $ | 0.31 | $ | 0.36 | $ | 0.94 | ||||||||
Average shares outstanding as reported: | ||||||||||||||||
Basic | 2,163 | 2,163 | 2,175 | 2,167 | ||||||||||||
Diluted | 2,187 | 2,178 | 2,190 | 2,189 | ||||||||||||
Pro forma average shares outstanding: | ||||||||||||||||
Basic | 3,278 | 3,278 | 3,278 | 3,278 | ||||||||||||
Diluted | 3,302 | 3,293 | 3,293 | 3,300 |
Pro forma combined diluted earnings per share for the nine month period ended September 30, 2005 is approximately 4 percent higher than the respective reported amount.
FCB Bancorp
FCB Bancorp, and its two wholly owned subsidiaries, First California Bank and South Coast Commercial Bank, is a leading community banking company with headquarters in Ventura County. As previously announced, FCB Bancorp will sell South Coast Commercial Bank to Woori America Bank for a premium of $1 million before taxes and expenses. Prior to this transaction, which is subject to regulatory approvals and is anticipated to close in the fourth quarter of 2005, most of the assets and liabilities of South Coast Commercial Bank, including all current retail customer accounts will be acquired or assumed by First California Bank.
First California Bank opened for business in 1979 and has six full service offices located in Camarillo, Oxnard, Simi Valley, Thousands Oaks, Ventura and Westlake Village. South Coast Commercial Bank has two full service offices in Irvine and Anaheim Hills and a loan production office in Torrance.
Contact information
C. G. Kum | Romolo Santarosa | |
President and Chief Executive Officer | Executive Vice President and Chief Financial Officer | |
805-322-9308 | 805-322-9333 | |
cgkum@fcbank.com | rsantarosa@fcbank.com |
* * * * * * * * * * *
This press release includes ‘forward-looking’ statements within the meaning of Section 27A of the Securities Act. All of the statements contained in this press release, other than statements of historical fact, should be considered forward-looking statements, including, but not limited to, those concerning (i) the Company’s strategies, objectives and plans for expansion of its operations, products and services, and growth of its portfolio of loans, deposits and investments, (ii) the Company’s beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of the Company, (iii) the Company’s beliefs as to the adequacy of the allowance for loan losses, and (iv) the Company’s beliefs and expectations of future operating results. Although the Company believes the expectations reflected in those forward-looking statements are reasonable, it can give no assurance that those expectations will prove to have been correct. All subsequent written and oral forward-looking statements by or attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this qualification. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are not intended to give any assurance as to future results. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
# # #
Selected financial data attached
FCB Bancorp
Selected Financial Data
(in thousands, except per share data) | ||||||||||||||||||||
3Qtr 2005 | 2Qtr 2005 | 1Qtr 2005 | 4Qtr 2004 | 3Qtr 2004 | ||||||||||||||||
Income statement summary | ||||||||||||||||||||
Net interest income | $ | 3,567 | $ | 3,359 | $ | 3,102 | $ | 2,937 | $ | 2,882 | ||||||||||
Service charges, fees & other income | 439 | 359 | 414 | 414 | 414 | |||||||||||||||
Loan commissions & sales | 69 | 66 | 102 | 47 | 83 | |||||||||||||||
Gains (losses) on sales of securities | — | 2 | — | 70 | 12 | |||||||||||||||
Operating expenses | 2,727 | 2,650 | 2,565 | 2,322 | 2,381 | |||||||||||||||
Provision for loan losses | 122 | 122 | 122 | 104 | 105 | |||||||||||||||
Income before income tax | 1,226 | 1,014 | 931 | 1,042 | 905 | |||||||||||||||
Income tax | 464 | 385 | 354 | 370 | 308 | |||||||||||||||
Net income | $ | 762 | $ | 629 | $ | 577 | $ | 672 | $ | 597 | ||||||||||
Balance sheet summary | ||||||||||||||||||||
Loans | $ | 326,151 | $ | 199,631 | $ | 185,778 | $ | 182,873 | $ | 173,453 | ||||||||||
Allowance for loan losses | 3,995 | 2,593 | 2,537 | 2,346 | 2,565 | |||||||||||||||
Securities | 77,171 | 73,934 | 75,005 | 77,345 | 75,981 | |||||||||||||||
Deposits | 361,188 | 238,468 | 231,882 | 227,188 | 208,878 | |||||||||||||||
Federal Home Loan Bank advances | 47,566 | 34,940 | 30,350 | 32,850 | 35,665 | |||||||||||||||
Junior subordinated debentures | 10,000 | — | — | — | — | |||||||||||||||
Shareholders’ equity | 44,960 | 23,664 | 22,587 | 22,545 | 22,012 | |||||||||||||||
Goodwill | �� | 17,241 | — | — | — | — | ||||||||||||||
Total assets | 467,391 | 298,294 | 285,909 | 283,745 | 268,273 | |||||||||||||||
Common shareholders’ data | ||||||||||||||||||||
Basic earnings per share | $ | 0.35 | $ | 0.29 | $ | 0.27 | $ | 0.31 | $ | 0.28 | ||||||||||
Diluted earnings per share | $ | 0.35 | $ | 0.29 | $ | 0.26 | $ | 0.31 | $ | 0.27 | ||||||||||
Book value per share | $ | 13.72 | $ | 10.94 | $ | 10.44 | $ | 10.42 | $ | 10.18 | ||||||||||
Basic weighted average shares | 2,175 | 2,163 | 2,163 | 2,163 | 2,163 | |||||||||||||||
Diluted weighted average shares | 2,190 | 2,178 | 2,187 | 2,184 | 2,175 | |||||||||||||||
Capital ratios | ||||||||||||||||||||
Total capital ratio * | 11.42 | % | 11.63 | % | 12.77 | % | 12.25 | % | 12.37 | % | ||||||||||
Tier 1 capital ratio * | 10.28 | % | 10.44 | % | 11.52 | % | 11.04 | % | 11.12 | % | ||||||||||
Tier 1 leverage ratio * | 8.65 | % | 8.20 | % | 8.27 | % | 8.31 | % | 8.11 | % | ||||||||||
Equity to assets | 9.62 | % | 7.93 | % | 7.90 | % | 7.95 | % | 8.21 | % | ||||||||||
Tangible equity to tangible assets | 6.16 | % | 7.93 | % | 7.90 | % | 7.95 | % | 8.21 | % | ||||||||||
Financial ratios | ||||||||||||||||||||
Return on average assets | 1.01 | % | 0.89 | % | 0.85 | % | 0.97 | % | 0.87 | % | ||||||||||
Return on average equity | 12.35 | % | 10.88 | % | 10.33 | % | 11.80 | % | 11.03 | % | ||||||||||
Efficiency ratio | 66.93 | % | 70.03 | % | 70.90 | % | 68.33 | % | 70.46 | % | ||||||||||
Net interest margin (tax equivalent) | 5.09 | % | 5.02 | % | 4.84 | % | 4.64 | % | 4.48 | % |
* | September 30, 2005 ratios are preliminary. |
FCB Bancorp
Selected Financial Data
(in thousands, except per share data) | Nine months ended September 30, | |||||||
2005 | 2004 | |||||||
Income statement summary | ||||||||
Net interest income | $ | 10,028 | $ | 8,719 | ||||
Service charges, fees & other income | 1,212 | 1,197 | ||||||
Loan commissions & sales | 237 | 172 | ||||||
Gains (losses) on sales of securities | 2 | 24 | ||||||
Operating expenses | 7,943 | 7,087 | ||||||
Provision for loan losses | 366 | 313 | ||||||
Income before income tax | 3,171 | 2,712 | ||||||
Income tax | 1,203 | 949 | ||||||
Net income | $ | 1,968 | $ | 1,763 | ||||
Balance sheet summary | ||||||||
Loans | $ | 362,151 | $ | 173,453 | ||||
Allowance for loan losses | 3,995 | 2,565 | ||||||
Securities | 77,171 | 75,981 | ||||||
Deposits | 361,188 | 208,878 | ||||||
Federal Home Loan Bank advances | 47,566 | 35,665 | ||||||
Junior subordinated debentures | 10,000 | — | ||||||
Shareholders’ equity | 44,960 | 22,012 | ||||||
Goodwill | 17,241 | — | ||||||
Total assets | 467,391 | 268,273 | ||||||
Common shareholders’ data | ||||||||
Basic earnings per share | $ | 0.91 | $ | 0.86 | ||||
Diluted earnings per share | $ | 0.90 | $ | 0.83 | ||||
Book value per share | $ | 13.72 | $ | 10.18 | ||||
Basic weighted average shares | 2,167 | 2,052 | ||||||
Diluted weighted average shares | 2,189 | 2,119 | ||||||
Capital ratios | ||||||||
Total capital ratio * | 11.42 | % | 12.37 | % | ||||
Tier 1 capital ratio * | 10.28 | % | 11.12 | % | ||||
Tier 1 leverage ratio * | 8.65 | % | 8.11 | % | ||||
Equity to assets | 9.62 | % | 8.21 | % | ||||
Tangible equity to tangible assets | 6.16 | % | 8.21 | % | ||||
Financial ratios | ||||||||
Return on average assets | 0.90 | % | 0.89 | % | ||||
Return on average equity | 11.05 | % | 11.77 | % | ||||
Efficiency ratio | 69.20 | % | 70.24 | % | ||||
Net interest margin (tax equivalent) | 4.95 | % | 4.79 | % |
* | September 30, 2005 ratios are preliminary. |