Exhibit 99.1
Contact: G. Langley | ||
Foothill Independent Bancorp | (626) 963-8551 |
PRESS RELEASE - April 19, 2004
FOOTHILL INDEPENDENT BANCORP POSTS RECORD FIRST QUARTER PROFITS
WHILE MAINTAINING EXCELLENT CREDIT QUALITY
GLENDORA, CA – Foothill Independent Bancorp (Nasdaq: FOOT), the parent holding company of Foothill Independent Bank, today reported an 8% increase in net income to $2.2 million, or $0.31 per diluted share, for the quarter ended March 31, 2004, from $2.0 million, or $.29 per share, in the first quarter a year ago. The annualized return on average equity (ROE) improved during the first quarter of 2004 to 14.3%, compared to 14.1% in the first quarter last year. A growing balance sheet and a continued focus on building core deposits were the principal contributors to the increase in net income and the improvement in ROE. All per share data has been adjusted to reflect the 9% stock dividend paid in January 2004.
“We are building new banking relationships and cross-selling additional products to existing customers,” stated George Langley, President and CEO. “We have concentrated on conservatively growing our loan portfolio while improving our deposit mix, and following this basic banking strategy has resulted in record first quarter profits and continued excellent credit quality.”
Assets increased 16% to $729 million at March 31, 2004 compared to $629 million at March 31, 2003, with total loans growing to $466 million at the end of the first quarter this year, from $453 million a year ago. Total deposits increased 17% to $653 million at the end of the first quarter of 2004, compared to $558 million a year earlier. Core deposits, defined as low- and no-cost deposits, increased 22% to $582 million, representing 89% of total deposits at quarter-end, compared to $477 million, or 85% of deposits at the end of the first quarter last year. Due primarily to the growth in assets, the annualized return on average assets was 1.26% for the first quarter this year, compared to 1.34% a year ago.
Credit quality remained excellent, with non-performing assets (NPAs) declining to $138,000, or 0.02% of total assets, at March 31, 2004. NPAs were $1.4 million, or 0.22% of assets at the end of the first quarter a year ago, and $626,000, or 0.09% of total assets at year-end 2003. The reserve for loan losses was $4.9 million at March 31, 2004, representing 1.06% of gross loans and far exceeding NPAs. The Bank recorded a net recovery of $7,000 during the first quarter of 2004, compared to a net recovery of $1,000 during the first quarter last year.
“The Southern California economy remains strong, although growth in the San Gabriel Valley has been slow,” Langley said. “We are currently adding deposits more rapidly than loans, so we are purchasing short-term investment securities, which typically carry lower yields than loans. As a result, we have seen sizable growth in assets while net interest income growth has been more moderate. We expect our net interest margin to improve as we are able to deploy our assets into higher yielding loans, or once interest rates begin to rise and improve yields on our existing adjustable rate loans.” Foothill’s net interest margin was 4.93% in the first quarter of 2004, compared to 5.22% in the fourth quarter of 2003 and 5.43% in the first quarter last year.
“I believe that expanding our branch network to the south will create the most opportunities for rapid growth, and we continue to look for a suitable acquisition candidate or locations for new branches,” Langley added. “In the meantime, we are investigating ways to maximize profitability in our existing locations, both through cost savings measures and revenue enhancements.”
Net interest income before the provision for loan losses increased 5% to $7.9 million in the first quarter of 2004, compared to $7.5 million in the first quarter last year. Interest income increased 3% primarily due to the expanded securities portfolio, while interest expense decreased 8% due to declining rates and a continued focus on building low-cost deposits. Other operating income increased 5% from the first quarter last year to $1.4 million.
Shareholders’ equity grew to $62 million at March 31, 2004, compared to $58 million a year earlier. Book value increased to $9.29 per share at the end of the first quarter this year, from $8.89 per share at March 31, 2003. Capital ratios continue to be above the “Well-Capitalized” guidelines established by the regulatory agencies. The Tier 1 Leverage Ratio was 9.92% and the Total Risk-based Capital Ratio was 14.10% at March 31, 2004.
About Foothill Independent Bancorp
Foothill Independent Bancorp is a one-bank holding company that owns and operates Foothill Independent Bank. The Bank currently operates 12 commercial banking offices in Los Angeles, San Bernardino and Riverside Counties. Foothill Independent Bank has consistently earned the highest ratings for safety and soundness from such bank rating firms as Findley Reports, Bauer Financial Services, and Veribanc.
Forward Looking Information
This Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and often include the words “believe,” “expect,” “anticipate,” “project,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements are estimates of, or expectations or beliefs regarding, our future financial condition or financial performance that are based on current information. Our business is subject to a number of risks and uncertainties that could adversely affect our ability to grow earnings per share, expand net interest margin, or maintain asset quality, or that could cause our operating expenses to increase, and, therefore, could cause our future financial condition or operating results to differ significantly from our current expectations and beliefs. Certain of those risks and uncertainties are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2003, as filed with the Securities and Exchange Commission. Readers of this Release are urged to read the cautionary statements, which are set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors That Could Affect Our Future Financial Performance” in Part II of that Report. Due to these uncertainties and risks, readers are cautioned not to place undue reliance on forward-looking statements contained in this Release, which speak only as of this date. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
2
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (Dollars in thousands, except per share amounts)
Three Months Ended March 31, | |||||||||
2004 | 2003 | Percent Change | |||||||
INTEREST INCOME | |||||||||
Interest on loans & leases | $ | 7,646 | $ | 7,847 | |||||
Interest on securities | 1,127 | 634 | |||||||
Interest on federal funds sold | 82 | 95 | |||||||
Interest other | 24 | 33 | |||||||
Total Interest Income | 8,879 | 8,609 | 3 | % | |||||
INTEREST EXPENSE | |||||||||
Deposits | 924 | 1,011 | |||||||
Interest on borrowings | 92 | 93 | |||||||
Total Interest Expense | 1,016 | 1,104 | -8 | % | |||||
Net interest Income | 7,863 | 7,505 | 5 | % | |||||
Provision for loan losses | — | — | |||||||
Net interest income after loan loss provision | 7,863 | 7,505 | 5 | % | |||||
OTHER OPERATING INCOME | |||||||||
Fees on deposits | 1,267 | 1,232 | |||||||
Gain on sales of SBA loans | 2 | 1 | |||||||
Other | 149 | 117 | |||||||
Total Other Operating Income | 1,418 | 1,350 | 5 | % | |||||
OPERATING EXPENSES | |||||||||
Salaries and employee benefits | 2,627 | 2,891 | |||||||
Occupancy and equipment | 1,115 | 981 | |||||||
Other | 2,101 | 1,800 | |||||||
Total Other Operating Expenses | 5,843 | 5,672 | 3 | % | |||||
Income before taxes | 3,438 | 3,183 | |||||||
Income Tax | 1,234 | 1,152 | |||||||
NET INCOME | $ | 2,204 | $ | 2,031 | 8 | % | |||
Per Share Data* | |||||||||
Earnings per common share - Basic | $ | 0.33 | $ | 0.31 | 6 | % | |||
Weighted average shares outstanding - Basic | 6,717,428 | 6,563,952 | |||||||
Earnings per common share - Diluted | $ | 0.31 | $ | 0.29 | 8 | % | |||
Weighted average shares outstanding - Diluted | 7,159,490 | 7,114,178 | |||||||
* | Per share data has been adjusted for the 9% stock dividend issued in January 2004. |
3
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited) (Dollars in thousands, except per share amounts)
March 31, | Percentage Change | ||||||||||
2004 | 2003 | ||||||||||
ASSETS: | |||||||||||
Noninterest earning demand deposits and cash on hand | $ | 43,807 | $ | 31,440 | |||||||
Federal funds sold and overnight repurchase agreements | 44,100 | 34,200 | |||||||||
Interest-earning deposits | 6,832 | 6,437 | |||||||||
Total Cash and Cash Equivalents | 94,739 | 72,077 | 31 | % | |||||||
Securities available for sale | 140,464 | 80,161 | |||||||||
Securities held to maturity | 7,899 | 9,481 | |||||||||
Total Securities | 148,363 | 89,642 | 66 | % | |||||||
Loans and leases receivable | 466,133 | 452,798 | 3 | % | |||||||
Reserve For loan losses | (4,954 | ) | (4,548 | ) | |||||||
Loans & Leases Receivable, Net | 461,179 | 448,250 | 3 | % | |||||||
Accrued interest receivable | 2,704 | 2,449 | |||||||||
Other real estate owned | — | — | |||||||||
Premises and equipment | 4,944 | 5,375 | |||||||||
Federal Home Loan Bank (FHLB) stock, at cost | 377 | 357 | |||||||||
Federal Reserve Bank (FRB) stock, at cost | 351 | 229 | |||||||||
Other assets | 16,198 | 10,914 | |||||||||
TOTAL ASSETS | $ | 728,855 | $ | 629,293 | 16 | % | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||||||||||
LIABILITIES: | |||||||||||
Non-interest bearing demand deposits | $ | 240,105 | $ | 205,687 | |||||||
Savings & NOW deposits | 162,754 | 143,483 | |||||||||
Money market deposits | 178,807 | 127,572 | |||||||||
Time deposits | 71,190 | 81,719 | |||||||||
Total Deposits | 652,856 | 558,461 | 17 | % | |||||||
Accrued employee benefits | 3,132 | 2,762 | |||||||||
Accrued interest and other liabilities | 2,124 | 1,895 | |||||||||
Other debt | 8,248 | 8,248 | |||||||||
Total Liabilities | 666,360 | 571,366 | 17 | % | |||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Common stock $0.001 par value-authorized: 25,000,000 shares; issued and outstanding: 6,729,477 and 6,516,214 shares, respectively | 7 | 6 | |||||||||
Additional paid-in capital | 67,413 | 52,458 | |||||||||
Retained earnings | (5,419 | ) | 5,220 | ||||||||
Accumulated other comprehensive income net of taxes | 494 | 243 | |||||||||
Total Stockholders’ Equity | 62,495 | 57,927 | 8 | % | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 728,855 | $ | 629,293 | 16 | % | |||||
4
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED FINANCIAL RATIOS
(Unaudited) (Dollars in thousands, except per share amounts)
Three Months Ended March 31, | ||||||
2004 | 2003 | |||||
Return on average assets* | *1.26 | % | 1.34 | % | ||
Return on average equity* | *14.32 | % | 14.06 | % | ||
Efficiency ratio* | 64.78 | % | 63.37 | % | ||
Annualized operating expense/average assets* | *3.33 | % | 3.75 | % | ||
Net interest margin | *4.93 | % | 5.43 | % | ||
Tier 1 capital ratio* | 9.92 | % | 10.78 | % | ||
Risk adjusted capital ratio* | 14.11 | % | 13.00 | % |
* | These ratios have been annualized. |
OTHER CONSOLIDATED FINANCIAL DATA (unaudited)
Three Months Ended March 31, | ||||||||
2004 | 2003 | |||||||
(Dollars in thousands, except per share amounts) | ||||||||
Net loans and leases | $ | 461,179 | $ | 448,178 | ||||
Non-performing/non-accrual loans* | ||||||||
Amounts | $ | 138 | $ | 1,413 | ||||
As a percentage of gross loans | 0.03 | % | 0.31 | % | ||||
Real estate owned - loans | $ | — | $ | — | ||||
Total non-performing assets | ||||||||
Amounts | $ | 138 | $ | 1,413 | ||||
As a percentage of total assets | 0.02 | % | 0.22 | % | ||||
Loan loss reserves | ||||||||
Amounts | $ | 4,954 | $ | 4,620 | ||||
As a percentage of gross loans | 1.06 | % | 1.02 | % | ||||
Loan loss provision | $ | — | $ | — | ||||
Net charge-offs (recoveries) | $ | (7 | ) | $ | (1 | ) |
* | Non-Accrual loans are loans that have made no payments of principal or interest for more than 90 days. |
At March 31, 2004 | At March 31, 2003 | |||||||
Book Value Per Share | $ | 9.29 | ** | $ | 8.89 | ** |
** | Adjusted for stock dividends payable subsequent to December 31, 2003 and 2002. |
5
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEET
(Unaudited) (Dollars in thousands, except per share amounts)
Three Months Ended March 31 | ||||||||
2004 | 2003 | |||||||
ASSETS | ||||||||
Earning assets: | ||||||||
Interest-earning deposits | $ | 6,588 | $ | 7,154 | ||||
Federal funds sold and overnight repurchase agreements | 34,724 | 33,009 | ||||||
Investment securities | 139,920 | 73,899 | ||||||
Loans and leasses (net of unearned income) | 463,376 | 444,512 | ||||||
Total earning assets | 644,608 | 558,574 | ||||||
Loan loss reserve | (4,943 | ) | (4,619 | ) | ||||
Non-earning assets | 62,574 | 50,885 | ||||||
TOTAL ASSETS | $ | 702,239 | $ | 604,840 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Interest-bearing liabilities: | ||||||||
Deposits: | ||||||||
Savings and interst bearing transaction accounts | $ | 325,423 | $ | 258,629 | ||||
Certificates of deposit, $100,000 or more | 30,357 | 33,499 | ||||||
Other time deposits | 43,494 | 50,088 | ||||||
Total interest-bearing deposits | 399,274 | 342,216 | ||||||
Other interest-bearing liabilities | 8,248 | 8,248 | ||||||
Total interest bearing liabilities | 407,522 | 350,464 | ||||||
Non-interest liabilities: | ||||||||
Demand deposits | 229,968 | 191,585 | ||||||
Other non-interest liabilities | 3,205 | 4,987 | ||||||
Total liabilities | 640,695 | 547,036 | ||||||
Stockholders’ equity | 61,544 | 57,804 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 702,239 | $ | 604,840 | ||||
6