Exhibit 99.1
ContactInformation:
Alan I. Rothenberg Chairman/Chief Executive Officer
Phone: (310) 270-9501
Jason P. DiNapoli
President/Chief Operating Officer
Phone: (310) 270-9505
1stCENTURYBANCSHARES,INC.REPORTSFINANCIALRESULTS
FORTHEQUARTER ENDEDMARCH 31, 2015
LosAngeles,CA(April 29,2015)– 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company for 1st Century Bank, N.A. (the “Bank”), today reported net income for the quarter ended March 31, 2015 of $315,000, compared to $402,000 for the same period last year. Pre-tax, pre-provision earnings for the quarter ended March 31, 2015 was $711,000, compared to $712,000 for the same period last year. Included in net income for the quarter ended March 31, 2015 are gains in connection with the sale of securities of $75,000, compared to $253,000 for the same period last year.
Pre-tax, pre-provision earnings, a non-GAAP financial measure, is presented because management believes adjusting the Company’s results to exclude taxes and loan loss provisions provides stockholders with a useful metric for evaluating the profitability of the Company. A schedule reconciling our GAAP net income to pre-tax, pre-provision earnings is provided in the table below.
Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of the Company, stated, “I’m pleased to announce our financial results for the quarter ended March 31, 2015. We finished this quarter at a new record level of total assets, loans and deposits. Total assets exceeded $615 million at March 31, 2015, representing an increase of over 5% during the first three months of the year, while our loans and deposits grew by over 8% and 6%, respectively. Additionally, our net interest income improved to $5.0 million and our net interest margin increased to 3.46%. In addition, asset quality remains strong with total non-performing assets to total assets at 10 basis points at the end of the current quarter.”
Jason P. DiNapoli, President and Chief Operating Officer of the Company, added, “The opening of our new Beverly Hills office contributed to the strong growth experienced this current quarter. The economic strength of the Westside of Los Angeles will provide further opportunities for 1st Century Bank.”
2015 1stQuarterHighlights
| | • | The Bank’s total risk-based capital ratio was 12.54% at March 31, 2015, compared to the requirement of 10.00% to generally be considered a “well capitalized” financial institution for regulatory purposes. The Bank’s equity is comprised solely of common stock and does not include any capital from trust preferred securities, convertible preferred stock or other equity or debt instruments. |
| | • | For the quarter ended March 31, 2015, the Company recorded net income of $315,000, or $0.03 per diluted share, compared to $402,000, or $0.04 per diluted share, for the same period last year. The decline in net income during the three months ended March 31, 2015 as compared to the same period last year was primarily due to a $150,000 increase in provision for loan losses, a $178,000 decline in gains from the sale of securities, and a $540,000 increase in non-interest expenses. The increase in non-interest expense primarily related to increases in salaries and benefits and occupancy costs. These items were partially offset by an increase in net interest income of $674,000, primarily related to a $79.5 million increase in the average balance of loans during the current quarter as compared to the same period last year. |
| | • | At March 31, 2015 and 2014, the Company’s book value per share was $6.15 and $5.85, respectively, representing an increase of 5.1%. |
| | • | Net interest margin was 3.46% for the quarter ended March 31, 2015, compared to 3.25% for the same period last year. The improvement in our net interest margin was primarily due to an increase in the average balance of loans relative to total earning assets as compared to the same period last year. During the quarter ended March 31, 2015 the average balance of loans relative to total earning assets was 77.3%, compared to 69.2% for the same period last year. |
| | • | Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits, and money market deposits and savings, were $493.8 million and $462.4 million at March 31, 2015 and December 31, 2014, respectively. Non-interest bearing deposits represent 59.6% of total deposits at March 31, 2015, compared to 56.1% at December 31, 2014. |
| | • | Cost of funds declined to 12 basis points for the quarter ended March 31, 2015, compared to 16 basis points for the same period last year. |
| | • | Loans increased to $479.9 million at March 31, 2015, compared to $442.9 million at December 31, 2014. Loan originations were $61.4 million during the quarter ended March 31, 2015, compared to $24.3 million during the same period last year. |
| | • | Non-performing loans were $632,000, or 0.13% of total loans, at March 31, 2015, compared to $632,000, or 0.14% of total loans, at December 31, 2014. |
| | • | Non-performing assets as a percentage of total assets were 0.10% and 0.11% at March 31, 2015 and December 31, 2014, respectively. |
| | • | Net loan recoveries were $16,000 during both quarters ended March 31, 2015 and 2014. |
| | • | As of March 31, 2015, the allowance for loan losses (“ALL”) was $7.8 million, or 1.62% of total loans, compared to $7.6 million, or 1.72% of total loans, at December 31, 2014. The ALL to non-performing loans was 1,229.31% and 1,203.03% at March 31, 2015 and December 31, 2014, respectively. |
| | • | Investment securities declined to $73.0 million at March 31, 2015, representing 11.8% of our total assets, compared to $79.7 million, or 13.6% of our total assets, at December 31, 2014. During the quarter ended March 31, 2015, the Company sold investment securities with an amortized cost of $5.9 million, recognizing gains of $75,000. During the quarter ended March 31, 2014, the Company sold $14.8 million of investment securities, recognizing gains of $253,000. |
CapitalAdequacy
At March 31, 2015, the Company’s stockholders’ equity totaled $62.5 million compared to $61.7 million at December 31, 2014. At March 31, 2015, the Bank’s total risk-based capital ratio, tier 1 risk-based capital ratio, common equity tier 1 ratio and tier 1 leverage ratio were 12.54%, 11.29%, 11.29% and 9.77%, respectively, compared to the requirements of 10.00%, 8.00%, 6.50% and 5.00%, respectively, to generally be considered a “well capitalized” financial institution for regulatory purposes.
BalanceSheet
Total assets at March 31, 2015 were $616.6 million, representing an increase of $31.4 million, or 5.4%, from $585.2 million at December 31, 2014. Cash and cash equivalents at March 31, 2015 were $60.1 million, representing an increase of $1.6 million, or 2.8%, from $58.5 million at December 31, 2014. Loans increased by $37.0 million, from $442.9 million at December 31, 2014 to $479.9 million at March 31, 2015. Loan originations were $61.4 million during the quarter ended March 31, 2015, compared to $24.3 million during the same period last year. The majority of loan originations during the quarter ended March 31, 2015, were related to commercial real estate loans and construction lending. Prepayment speeds for the quarter ended March 31, 2015 were 11.0%, compared to 14.3% for the same period last year. Investment securities were $73.0 million at March 31, 2015, compared to $79.7 million at December 31, 2014, representing a decline of $6.7 million, or 8.4%. During the quarter ended March 31, 2015, the Company sold investment securities with an amortized cost of $5.9 million, recognizing gains of $75,000. During the quarter ended March 31, 2014, the Company sold $14.8 million of investment securities, recognizing gains of $253,000. The weighted average life of our investment securities was 3.87 years and 4.02 years at March 31, 2015 and December 31, 2014, respectively.
Total liabilities at March 31, 2015 increased by $30.6 million, or 5.8%, to $554.1 million compared to $523.5 million at December 31, 2014. This increase is primarily due to a $31.1 million increase in deposits. Total core deposits, which includes non-interest bearing demand deposits, interest bearing demand deposits and money market deposits and savings, were $493.8 million and $462.4 million at March 31, 2015 and December 31, 2014, respectively, representing an increase of $31.4 million, or 6.8%.
CreditQuality
AllowanceandProvisionforLoanLosses
The ALL was $7.8 million, or 1.62% of our total loan portfolio, at March 31, 2015, compared to $7.6 million, or 1.72% of our total loan portfolio, at December 31, 2014. At both March 31, 2015 and December 31, 2014, our non-performing loans were $632,000. The ratio of our ALL to non-performing loans was 1,229.31% and 1,203.03% at March 31, 2015 and December 31, 2014, respectively. In addition, our ratio of non-performing loans to total loans was 0.13% and 0.14% at March 31, 2015 and December 31, 2014, respectively.
The ALL is impacted by inherent risk in the loan portfolio, including the level of our non-performing loans, as well as specific reserves and charge-off activities. During the quarter ended March 31, 2015, we recorded a provision for loan losses of $150,000, compared to no provision for the same period last year. The increase in our provision for loan losses during the quarter ended March 31, 2015 compared to the same period last year was primarily attributable to the increase in the growth rate of our loan portfolio during the current quarter. During the quarter ended March 31, 2015, the Bank’s loan portfolio increased by 8.4%, compared to a decline of 2.0% during the same period last year.
Criticized and classified loans generally consist of special mention, substandard and doubtful loans. Special mention, substandard and doubtful loans were $180,000, $1.3 million and none, respectively, at March 31, 2015, compared to $3.4 million, $2.1 million and none, respectively, at March 31, 2014. We had net recoveries of $16,000 during both the quarters ended March 31, 2015 and 2014. At March 31, 2015, the ALL to total loans was 1.62% compared to 1.72% at December 31, 2014. The risks associated with the adequacy of our ALL and the decline in this ratio may have increased as a result of our loan growth. Management will continue to closely monitor the adequacy of the ALL and will make adjustments as warranted. Management believes that the ALL as of March 31, 2015 and December 31, 2014 was adequate to absorb probable and inherent risks in the loan portfolio.
Non-PerformingAssets
Non-performing assets totaled $632,000 at both March 31, 2015 and December 31, 2014. Non-accrual loans totaled $632,000 at both March 31, 2015 and December 31, 2014. As a percentage of total assets, the amount of non-performing assets was 0.10% and 0.11% at March 31, 2015 and December 31, 2014, respectively.
NetInterestIncomeandMargin
During the quarter ended March 31, 2015, net interest income was $5.0 million, compared to $4.3 million for the same period last year. The improvement in net interest income was primarily attributable to increases in the average balances of our loan portfolio during the quarter ended March 31, 2015 as compared to the same period last year, partially offset by a decline in the average balance of our investment portfolio during the same period. The average balances of our loan portfolio were $454.7 million during the quarter ended March 31, 2015, compared to $375.2 million for the same period last year. The average balances of our investment portfolio were $78.6 million during the quarter ended March 31, 2015, compared to $107.5 million for the same period last year.
The Company’s net interest margin (net interest income divided by average interest earning assets) was 3.46% for the quarter ended March 31, 2015, compared to 3.25% for the same period last year. The 21 basis point increase in net interest margin is primarily due to an increase in the average balance of loans relative to total average earning assets as compared to the same period last year. The percentage of average loans to total average earning assets increased to 77.3% during the quarter ended March 31, 2015, compared to 69.2% during the same period last year.
Non-InterestIncome
Non-interest income was $230,000 for the quarter ended March 31, 2015, compared to $365,000 for the same period last year. During the quarter ended March 31, 2015, the Company sold investment securities with an amortized cost of $5.9 million, recognizing gains of $75,000. During the quarter ended March 31, 2014, the Company sold $14.8 million of investment securities, recognizing gains of $253,000. With the exception of such gains, non-interest income primarily consists of customer related fee income.
Non-InterestExpense
Non-interest expense was $4.5 million for the quarter ended March 31, 2015, compared to $4.0 million for the same period last year. The increases in non-interest expense during the quarter ended March 31, 2015 as compared to the same period last year is primarily due to the costs incurred to expand the Bank’s business development and related operational support teams, as well as the supplemental costs associated with the Bank’s Beverly Hills expansion.
IncomeTaxProvision
During the quarters ended March 31, 2015 and 2014, we recorded tax provisions of $246,000 and $310,000, respectively.
NetIncome
For the quarter ended March 31, 2015, the Company recorded net income of $315,000, or $0.03 per diluted share, compared to $402,000, or $0.04 per diluted share, for the same period last year. Included in net income for the quarters ended March 31, 2015 and 2014, are gains in connection with the sale of securities of $75,000 and $253,000, respectively.
About 1stCentury Bancshares, Inc.
1st Century Bancshares, Inc. is a publicly owned company traded on the NASDAQ Capital Market under the symbol “FCTY.” The Company’s wholly-owned subsidiary, 1st Century Bank, N.A., is headquartered in the Century City area of Los Angeles, with a full service business bank in Century City, CA, and relationship offices in Santa Monica and Beverly Hills, CA. The Bank’s primary focus is serving the specific banking needs of entrepreneurs, professionals and small businesses with the personal service of a traditional community bank, while offering the technologies of a big money center bank. The Company maintains a website at www.1cbank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein.
SafeHarbor
Certainmattersdiscussedin thispressreleasemayconstituteforward-lookingstatementswithinthemeaningofthePrivateSecurities LitigationReformActof1995.Youcanfindmany(butnotall)oftheseforward-lookingstatementsbylookingforwordssuchas“approximates,”“believes,”“expects,”“anticipates,”“estimates,”“intends,”“plans,”“would,”“may”orothersimilarexpressions in thispressrelease.Thesestatementsarebaseduponourmanagement’scurrentexpectationsand speakonlyasofthe datehereof.Forward-lookingstatementsaresubjectto certainrisksanduncertaintiesthatcouldcauseouractualresults,performanceorachievementstodiffermateriallyandadverselyfromthoseexpressed,suggestedorimpliedherein.Accordingly, investorsshouldusecautioninrelyingonforward-lookingstatementstoanticipatefutureresultsortrends.Theserisksand uncertaintiesinclude,butarenotlimitedto:(1)theimpactofchangesininterestrates,(2)politicalinstability,(3)changesin themonetarypoliciesoftheU.S.Government,(4)areneweddeclinein economicconditions,(5)reneweddeteriorationinthevalueofCaliforniarealestate,bothresidentialandcommercial,(6)an increasein thelevelofnon-performingassetsandcharge-offs,(7) furtherincreasedcompetitionamongfinancialinstitutions,(8)the Company’sabilitytocontinuetoattractinterestbearingdepositsand qualityloancustomers,(9)furthergovernmentregulationandtheimplementationandcostsassociatedwiththe same,(10)internalandexternalfraudandcyber-securitythreatsincludingthelossofbankorcustomerfunds,lossofsystemfunctionalityorthetheftorlossofdata,(11)management’sabilitytosuccessfullymanagethe Company’soperations, and (12)theotherriskssetforthin the Company’sreportsfiledwiththeU.S.SecuritiesandExchangeCommission.TheCompanydoesnotundertake,andspecificallydisclaimsanyobligationtoreviseorupdateanyforward-lookingstatementsforanyreason.
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(Tables follow)
SUMMARYFINANCIALINFORMATION
The following tables present relevant financial data from the Company’s recent performance (dollars in thousands, except per share data):
| | | March, 2015 | | | December 31, 2014 | | | March, 2014 | |
| Balance Sheet Results: | | (unaudited) | | | | | | | (unaudited) | |
Total Assets | | $ | 616,650 | | | $ | 585,218 | | | $ | 554,773 | |
Total Loans | | $ | 479,858 | | | $ | 442,856 | | | $ | 376,064 | |
Allowance for Loan Losses (“ALL”) | | $ | 7,765 | | | $ | 7,599 | | | $ | 7,252 | |
Non-Performing Assets | | $ | 632 | | | $ | 632 | | | $ | 825 | |
Investment Securities-AFS, at estimated fair value | | $ | 72,978 | | | $ | 79,689 | | | $ | 102,550 | |
Deposits: | | | | | | | | | | | | |
Non-Interest Bearing Demand Deposits | | $ | 318,646 | | | $ | 282,217 | | | $ | 240,962 | |
Interest Bearing Demand Deposits | | | 24,768 | | | | 25,492 | | | | 21,595 | |
Money Market Deposits and Savings | | | 150,346 | | | | 154,706 | | | | 162,701 | |
Certificates of Deposit | | | 40,536 | | | | 40,757 | | | | 41,847 | |
Total Deposits | | $ | 534,296 | | | $ | 503,172 | | | $ | 467,105 | |
Total Stockholders’ Equity | | $ | 62,549 | | | $ | 61,693 | | | $ | 58,337 | |
Gross Loans to Deposits | | | 89.80 | % | | | 88.00 | % | | | 80.49 | % |
Ending Book Value per Share | | $ | 6.15 | | | $ | 6.08 | | | $ | 5.85 | |
Common Shares Outstanding | | | 10,166,441 | | | | 10,140,441 | | | | 9,966,330 | |
| | | | | | | | | | | | | |
| | Quarters Ended March 31, | | | | | |
Quarterly Operating Results (unaudited): | | 2015 | | | 2014 | | | | | |
Net Interest Income | | $ | 5,020 | | | $ | 4,346 | | | | | |
Provision for Loan Losses | | $ | 150 | | | $ | — | | | | | |
Gain on Sale of AFS Securities | | $ | 75 | | | $ | 253 | | | | | |
Non-Interest Income | | $ | 155 | | | $ | 112 | | | | | |
Non-Interest Expense | | $ | 4,539 | | | $ | 3,999 | | | | | |
Income Tax Provision | | $ | 246 | | | $ | 310 | | | | | |
Net Income | | $ | 315 | | | $ | 402 | | | | | |
Basic Earnings per Share | | $ | 0.03 | | | $ | 0.04 | | | | | |
Basic Shares Outstanding | | | 9,537,677 | | | | 9,293,251 | | | | | |
Diluted Earnings per Share | | $ | 0.03 | | | $ | 0.04 | | | | | |
Diluted Shares Outstanding | | | 9,804,333 | | | | 9,710,497 | | | | | |
Quarterly Net Interest Margin* | | | 3.46 | % | | | 3.25 | % | | | | |
| | | | | | | | | | | | | |
Reconciliation of QTD Net Income to Pre-Tax, Pre-Provision Earnings: | | | | | | | | | | | | |
Net Income | | $ | 315 | | | $ | 402 | | | | | |
Provision for Loan Losses | | | 150 | | | | — | | | | | |
Income Tax Provision | | | 246 | | | | 310 | | | | | |
Pre-Tax, Pre-Provision Earnings | | $ | 711 | | | $ | 712 | | | | | |
| | |
| *Percentages are reported on an annualized basis |
