Exhibit 99.1
Foothill Independent Bancorp Posts Record Second Quarter Profits;
Net Income Increases 12%
GLENDORA, Calif.--(BUSINESS WIRE)--July 19, 2004--Foothill
Independent Bancorp (Nasdaq: FOOT), the holding company of Foothill
Independent Bank, today reported that a continued focus on building
core deposits and improved operating efficiencies resulted in record
profits in the both the second quarter and first half of 2004. Net
income increased 12% to $2.21 million, or $0.31 per diluted share, in
the quarter ended June 30, 2004, compared to $1.97 million, or $0.28
per share in the second quarter last year. For the first six months of
2004, net income grew 10% to $4.41 million, or $0.62 per diluted
share, from $4.00 million, or $0.56 per diluted share in the first
half of 2003.
"Foothill has posted another record quarter by following a basic
banking strategy: growing high-quality earning assets funded by
low-cost deposits," stated George Langley, President and CEO. "In the
banking industry, this is an extremely efficient use of the capital
provided by our shareholders, and as a result we have been recognized
for our consistently high return on equity."
Earlier this month, Foothill was ranked #52 in the Top 200
Publicly Traded Banks with less than $1 billion in assets by U.S.
Banker magazine, based on three-year return on equity (ROE).
Annualized ROE improved to 14.5% in the second quarter of 2004, from
13.6% in the second quarter last year. For the six months ended June
30, 2004, ROE improved to 14.4%, compared to 13.8% in the same period
of 2003. Annualized return on average assets was 1.20% for the second
quarter and 1.23% for the first six months of 2004, compared to 1.23%
and 1.29%, respectively, in 2003.
"We have positioned our balance sheet to benefit from a measured
rise in interest rates," Langley continued. "While a severe rate hike
would have a negative impact in the short-term, our low cost of funds
and largely adjustable-rate portfolio should result in an expanded net
interest margin as rates slowly increase. In addition, we have built a
sizable securities portfolio, as our deposit generation has outpaced
loan originations. We are currently seeing an increase in loan demand
and are working to deploy that capital into higher-yielding loans
while maintaining credit quality."
Credit quality has remained exceedingly strong:
-- Net recoveries were recorded in both the second quarter and
first half of 2004.
-- Non-performing assets (NPAs) declined to $185,000, or 0.02% of
total assets at the end of the second quarter, compared to
$1.75 million, or 0.27% of assets a year ago, and $626,000, or
0.09% of total assets at year-end 2003.
-- The reserve for loan losses grew to $5.0 million at the end of
the second quarter of 2004, representing 1.05% of gross loans
and far exceeding NPAs.
Total assets increased 15% to $744.3 million at the end of the
second quarter, compared to $649.4 million a year ago, with total
loans growing to $473.8 million, from $464.5 million at the midway
point last year. The securities portfolio grew 74% to $162.5 million
at June 30, 2004, compared to $93.4 million at the end of June last
year. Total deposits were up 16% to $670.5 million at June 30, 2004,
from $578.7 million a year earlier. Core deposits, consisting of
low-cost savings and money market deposits and no-cost demand
deposits, increased 21% to $602.0 million, representing 90% of total
deposits at June 30, 2004, compared to $498.2 million, or 86% of total
deposits at June 30, 2003. By comparison, time deposits decreased by
15% to $68.5 million at June 30, 2004, from $80.5 million a year ago.
"Our focus on building core deposits has allowed us to post a net
interest margin that, while off slightly from a year ago, continues to
exceed that of most of our peers," Langley said. Net interest margin
was 4.65% in the second quarter and 4.79% in the first six months of
2004, compared to 5.08% in the quarter last year and 5.25% for the
first half of 2003.
Net interest income grew 4% in both the quarter and six-month
period ended June 30, 2004, due to an increase in average earning
assets as well as decreased interest expense. Net interest income was
$7.70 million in the second quarter of 2004, compared to $7.42 million
last year, and $15.56 million in the first six months of the year,
compared to $14.92 million a year ago. Other operating income remained
largely unchanged, declining by 1% to $1.42 million in the second
quarter of 2004, and increasing slightly to $2.83 million in the six
months ended June 30, 2004.
"Operating expenses were unchanged from a year ago at $5.67
million on a quarterly basis, and up only slightly to $11.51 million
on a six-month basis," Langley said. "As a result, our efficiency
ratio improved to 63.7% in the second quarter of 2004 from 64.6% a
year ago, and to 64.3% for the six-month period, compared to 64.7% for
the first half of 2003."
Shareholders' equity was $61.3 million at June 30, 2004, compared
to $58.6 million a year earlier, and book value increased to $9.12 per
share at the end of the second quarter, from $8.90 per share at June
30, 2003. Capital ratios continue to be above the "Well-Capitalized"
guidelines established by U.S. Bank Regulatory Agencies. The Tier 1
Leverage Ratio was 9.62% and the Total Risk-based Capital Ratio was
13.94% at June 30 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 future financial performance that are based on
current information. Our future financial condition or operating
results could differ significantly from our current expectations and
beliefs due to a number of risks and uncertainties, including risks
that could adversely affect our ability to grow earnings per share,
expand net interest margin, maintain asset quality, or that could
cause our operating expenses to increase,. 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.
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Dollars in Thousands, Except Per Share Data
(Unaudited)
Three Months Ended
June 30, Percent
2004 2003 Change
---------------------------------
Interest on loans & leases $7,446 $7,717
Interest on securities 1,223 714
Interest on federal funds sold 84 96
Interest other 30 29
----------- -----------
Total Interest Income 8,783 8,556 3%
Deposits 992 1,045
Interest on borrowings 92 93
----------- -----------
Total Interest Expense 1,084 1,138 (5)%
Net interest income 7,699 7,418 4%
Provision for loan losses -- 100 (100)%
----------- -----------
Net Interest income after
Provision for loan losses 7,699 7,318 5%
Fees on deposits 1,291 1,283
Gain on sales of SBA loans 3 --
Other 123 151
----------- -----------
Total Other Operating Income 1,417 1,434 (1)%
Salaries and employee benefits 2,729 2,838
Occupancy and equipment 1,010 1,020
Other 1,928 1,806
----------- -----------
Total Other Operating Expenses 5,667 5,664 0%
----------- -----------
Income before taxes 3,449 3,088
Income tax 1,242 1,115
----------- -----------
NET INCOME $2,207 $1,973 12%
=========== ===========
Earnings per common share -- Basic $0.33 $0.30 10%
=========== ===========
Weighted average shares
outstanding -- Basic 6,722,111 6,538,092
=========== ===========
Earnings per common share -- Diluted $0.31 $0.28 11%
=========== ===========
Weighted average shares
outstanding -- Diluted 7,126,619 7,017,937
=========== ===========
Six Months Ended
June 30, Percent
2004 2003 Change
---------------------------------
Interest on loans & leases $15,092 $15,564
Interest on securities 2,350 1,348
Interest on federal funds sold 166 191
Interest other 54 62
----------- -----------
Total Interest Income 17,662 17,165 3%
Deposits 1,916 2,056
Interest on borrowings 184 186
----------- -----------
Total Interest Expense 2,100 2,242 (6%)
Net interest income 15,562 14,923 4%
Provision for loan losses -- 100 (100%)
----------- -----------
Net Interest income after
Provision for loan losses 15,562 14,823 5%
Fees on deposits 2,557 2,515
Gain on sales of SBA loans 5 1
Other 272 268
----------- -----------
Total Other Operating Income 2,834 2,784 2%
Salaries and employee benefits 5,356 5,729
Occupancy and equipment 2,125 2,001
Other 4,028 3,606
----------- -----------
Total Other Operating Expenses 11,509 11,336 2%
----------- -----------
Income before taxes 6,887 6,271
Income tax 2,476 2,267
----------- -----------
NET INCOME $4,411 $4,004 10%
=========== ===========
Earnings per common share -- Basic $0.66 $0.61 8%
=========== ===========
Weighted average shares
outstanding -- Basic 6,719,770 6,550,454
=========== ===========
Earnings per common share -- Diluted $0.62 $0.56 11%
=========== ===========
Weighted average shares
outstanding -- Diluted 7,150,532 7,127,518
=========== ===========
NOTE: Per share data for the quarter ended June 30, 2003 has been
retroactively adjusted for stock dividends paid subsequent to
December 31, 2003.
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
At June 30, Percentage
2004 2003 Change
---------------------------------
ASSETS: (Dollars in thousands)
Noninterest earning demand deposits
and cash on hand $39,253 $34,745
Federal funds sold and overnight
repurchase agreements 36,700 29,500
Interest-earning deposits 8,218 8,514
----------- -----------
Total Cash and Cash Equivalents 84,171 72,759 16%
Securities available for sale 155,601 83,896
Securities held to maturity 6,872 9,480
----------- -----------
Total Securities 162,473 93,376 74%
Loans and leases receivable 473,833 464,549 2%
Reserve for loan losses (4,989) (4,665)
----------- -----------
Loans & Leases Receivable, Net 468,844 459,884 2%
Accrued interest receivable 2,717 2,321
Other real estate owned -- --
Premises and equipment 4,872 5,139
Federal Home Loan Bank (FHLB) stock,
at cost 3,389 366
Federal Reserve Bank (FRB) stock, at
cost 351 229
Other assets 17,482 15,310
----------- -----------
TOTAL ASSETS $744,299 $649,384 15%
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Non-interest bearing demand deposits $250,988 $212,943
Savings & NOW deposits 160,407 144,744
Money market deposits 190,612 140,502
Time deposits 68,493 80,471
----------- -----------
Total Deposits 670,500 578,660 16%
Accrued employee benefits 3,239 2,869
Accrued interest and other
liabilities 1,013 990
Other debt 8,248 8,248
----------- -----------
Total Liabilities 683,000 590,767 16%
Stockholders' Equity:
Common stock $0.001 par value --
authorized: 25,000,000 shares;
Issued and outstanding: 6,719,165
and 6,516,214 shares, respectively 7 6
Additional paid-in capital 67,458 52,790
Retained earnings (4,458) 5,427
Accumulated other comprehensive
income net of taxes (1708) 394
----------- -----------
Total Stockholders' Equity 61,299 58,617 5%
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $744,299 $649,384 15%
=========== ===========
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED FINANCIAL RATIOS
(unaudited)
Three Months Ended(1) Six Months Ended(1)
June 30, June 30,
2004 2003 2004 2003
--------------------- -------------------
Return on average assets 1.20% 1.23% 1.23% 1.29%
Return on average equity 14.54% 13.59% 14.43% 13.82%
Efficiency ratio 63.74% 64.59% 64.25% 64.68%
Annualized operating
expense/average assets 3.09% 3.54% 3.20% 3.64%
Net interest margin 4.65% 5.08% 4.79% 5.25%
Tier 1 capital ratio 9.62% 10.30% 9.62% 10.30%
Risk adjusted capital ratio 13.94% 13.74% 13.94% 13.74%
(1) All ratios have been annualized.
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
OTHER CONSOLIDATED FINANCIAL DATA
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
------------------ ----------------
(Dollars in thousands)
Net loans and leases $468,844 $459,884 $468,844 $459,884
Non-performing/
non-accrual loans(1)
Amounts $185 $1,748 $185 $1,748
As a percentage of gross
loans 0.04% 0.38% 0.04% 0.38%
Real estate owned -- loans $-- $-- $-- $--
Total non-performing assets
Amounts $185 $1,748 $185 $1,748
As a percentage of total
assets 0.02% 0.27% 0.02% 0.27%
Loan loss reserves
Amounts $4,989 $4,665 $4,989 $4,665
As a percentage of gross
loans 1.05% 1.00% 1.05% 1.00%
Loan loss provision $-- $100 $-- $100
Net charge-offs (recoveries) $(35) $(6) $(42) $(7)
(1) Non-Accrual loans are loans that have made no payments of
principal or interest for more than 90 days.
At June 30,
2004 2003
----- -----
Book Value Per Share(1) $9.12 $8.90
(1) Adjusted for stock dividends issued subsequent to December 31,
2003 and 2002.
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
AVERAGE BALANCES
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
------------------ ----------------
ASSETS (In Thousands)
Earning assets:
Interest-earning deposits $7,820 $7,346 $7,204 $7,250
Federal funds sold and
overnight repurchase
agreements 35,548 33,543 35,136 33,277
Investment securities 157,154 93,185 148,537 83,595
Loans and leases (net of
unearned income) 470,848 455,357 467,112 450,028
--------- --------- --------- ---------
Total earning assets 671,370 589,431 657,989 574,150
Loan loss reserve (4,979) (4,626) (4,961) (4,622)
Non-earning assets 66,606 54,665 65,864 53,132
--------- --------- --------- ---------
Total Assets $732,997 $639,470 $718,892 $622,660
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Savings and interest bearing
transaction accounts $343,503 $280,968 $334,463 $269,861
Certificates of deposit,
$100,000 or more 30,109 31,828 30,233 32,655
Other time deposits 40,938 49,754 42,217 49,920
--------- --------- --------- ---------
Total interest-bearing
deposits 414,550 362,550 406,913 352,436
Other interest-bearing
liabilities 8,000 8,000 8,000 8,000
--------- --------- --------- ---------
Total interest bearing
liabilities 422,550 370,550 414,913 360,436
Non-interest bearing
liabilities:
Demand deposits 244,820 206,619 237,386 199,872
Other non-interest bearing
liabilities 4,880 4,233 5,447 4,416
--------- --------- --------- ---------
Total liabilities 672,250 581,402 657,746 564,724
Stockholders' equity 60,747 58,068 61,146 57,936
--------- --------- --------- ---------
Total Liabilities and
Stockholders' Equity $732,997 $639,470 $718,892 $622,660
========= ========= ========= =========
CONTACT: Foothill Independent Bancorp
G. Langley, 626-963-8551