Exhibit 99.1
Foothill Independent Bancorp Record Profits Up 9% in the Third Quarter;
Management Expects Margin to Benefit from Continued Rising Interest Rates
GLENDORA, Calif.--(BUSINESS WIRE)--Oct. 21, 2004--Foothill
Independent Bancorp (NASDAQ:FOOT), the parent holding company of
Foothill Independent Bank, today reported that continued core deposit
and adjustable-rate loan growth fueled record profits in both the
third quarter and first nine months of 2004. In the quarter ended
September 30, 2004, net income increased 9% to $2.39 million, or $0.33
per diluted share, compared to $2.20 million, or $0.31 per diluted
share in the like quarter a year ago. In the nine months ended
September 30, 2004, net income grew 10% to $6.80 million, or $0.95 per
diluted share, from $6.20 million, or $0.87 per diluted share in the
same period of 2003.
"We are committed to utilizing low-cost deposits to fund
high-quality, prime-based and adjustable-rate loans," stated George
Langley, President and CEO. "As a result, our net interest margin
shows sequential-quarter improvement this year and credit quality
remains outstanding. Looking ahead, our balance sheet is positioned to
benefit further should interest rates continue to rise at a measured
pace."
Core deposits, consisting of no-cost demand deposits and low-cost
savings and money market deposits, increased 14% to $603.9 million at
September 30, 2004, compared to $532.0 million at September 30, 2003.
In the same period, time deposits decreased by 15% to $66.2 million at
quarter-end, from $78.0 million a year ago. Core deposits now
represent 90% of total deposits, compared to 87% of deposits at
September 30, 2003. Total deposits were up 10% to $670.1 million at
September 30, 2004, from $610.0 million a year earlier.
Total assets increased 9% to $747.4 million at the end of the
third quarter, compared to $683.4 million at September 30, 2003. Net
loans were up 6%, growing to $473.9 million from $447.4 million a year
ago, while the securities portfolio increased 15% to $171.0 million,
versus $148.5 million at the end of September last year.
"The rise in short-term interest rates and the shift in our
balance sheet had a positive effect on our net interest margin,"
Langley said. "We expect to continue to see sequential-quarter
improvement, assuming continued loan demand." Net interest margin
improved 23 basis points to 4.88% in the third quarter, compared to
4.65% in the second quarter of 2004. A year ago, the net interest
margin was 5.40% in the third quarter.
"In the last year, deposit growth has outpaced loan generation, so
we have continued to build up our securities portfolio. The greater
concentration of securities, which typically earn lower yields than
loans, has resulted in a drop in net interest margin on a
year-over-year basis. With a goal of building long-term shareholder
value, we will not sacrifice asset quality to better our near-term
results." For the first nine months of this year, the net interest
margin was 4.82%, compared to 5.29% for the same period in 2003.
Credit quality remains exceptionally strong:
-- Non-performing assets (NPAs) declined to $141,000, or 0.02% of
total assets at the end of the third quarter, compared to
$980,000, or 0.14% of assets a year ago.
-- The reserve for loan losses grew to $5.0 million at the end of
the third quarter of 2004, representing 1.04% of gross loans
and far exceeding NPAs.
-- Foothill recorded a net recovery of $34,000 for the first nine
months of 2004.
Annualized return on average equity (ROE) improved to 15.2% in the
third quarter of 2004, from 14.9% in the third quarter last year. For
the nine months ended September 30, 2004, ROE improved to 14.7%, from
14.2% in the same period of 2003. Annualized return on average assets
(ROA) was 1.28% for the third quarter and 1.24% for the first nine
months of 2004, compared to 1.31% and 1.29%, respectively, in 2003.
Net interest income was up moderately to $8.35 million in the
third quarter of 2004, compared to $8.27 million in the third quarter
last year, driven by an increase in average earning assets and a
decrease in time deposits. In the first nine months of the year, net
interest income was $23.9 million in 2004, compared to $23.2 million
for the same period in 2003.
Other operating income also increased slightly, to $1.44 million
in the third quarter of 2004, from $1.42 million in the previous year,
and to $4.3 million in the nine months ended September 30, 2004 from
$4.2 million for the first nine months of 2003. The rise in other
operating income was a result of increased fee income generated in
deposit accounts.
Other operating expenses declined to $6.00 million in the quarter
ended September 30, 2004, from $6.1 million for the same quarter of
2003. For the first nine months of 2004, other operating expenses rose
slightly to $17.5, million from $17.4 in the first nine months of last
year. The efficiency ratio was 63.1% in the third quarter of 2004 from
62.1% for the same period of 2003. However, for the nine-month period,
the efficiency ratio improved to 63.8% from 64.3% for the same period
in 2003, due to the increase in other operating income.
At September 30, 2004, shareholders' equity was $64.2 million,
compared to $60.3 million a year earlier, and book value increased to
$9.55 per share from $9.02 per share at September 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 9.66% and the Total Risk-based Capital Ratio was 14.08% at
September 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, as set forth in this Release, due to a number of risks and
uncertainties, which include risks such as; increased competition from
other financial and depository institutions and possible adverse
changes in national economic conditions, either of which could
adversely affect our ability to improve net interest margin and to
grow earnings per share, adverse changes in local economic conditions
and declines in real estate values that could result in a decline in
the quality of interest earning assets, principally loans; and changes
in regulatory requirements and the costs of growing our business
through the addition of new branches or possible acquisitions of other
banks, either of which 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
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ Percent ---------------- Percent
2004 2003 Change 2004 2003 Change
---------- ------- ------- -------- -------- -------
Interest Income
Interest on
loans & leases $7,893 $8,233 $22,985 $23,797
Interest on
securities 1,414 970 3,764 2,318
Interest on
federal funds
sold 141 81 307 272
Interest other 36 33 90 95
---------- ------- -------- --------
Total Interest
Income 9,484 9,317 2% 27,146 26,482 3%
Interest Expense
Deposits 1,033 949 2,949 3,005
Interest on
borrowings 102 94 286 280
---------- ------- -------- --------
Total Interest
Expense 1,135 1,043 9% 3,235 3,285 (2)%
Net interest
income 8,349 8,274 1% 23,911 23,197 3%
Provision for
loan losses 78 200 (61)% 78 300 (74)%
---------- ------- -------- --------
Net interest
income after
loan loss
provision 8,271 8,074 2% 23,833 22,897 4%
Other Operating
Income
Fees on deposits 1,264 1,217 3,821 3,732
Gain on sales of
SBA loans -- 2 5 3
Other 180 196 452 464
---------- ------- -------- --------
Total Other
Operating
Income 1,444 1,415 2% 4,278 4,199 2%
Other Operating
Expense
Salaries and
employee
benefits 3,298 3,090 8,654 8,819
Occupancy and
equipment 1,069 1,044 3,194 3,045
Other 1,629 1,943 5,657 5,549
---------- ------- -------- --------
Total Other
Operating
Expenses 5,996 6,077 (1)% 17,505 17,413 1%
---------- ------- -------- --------
Income before
taxes 3,719 3,412 10,606 9,683
Income tax 1,325 1,215 3,801 3,482
---------- ------- -------- --------
NET INCOME $2,394 $2,197 9% $6,805 $6,201 10%
========== ======= ======== ========
Per Share Data(a)
Earnings per
share - Basic $0.35 $0.33 6% $1.01 $0.94 7%
========== ============= ========== ==========
Wtd. Avg. shares
outstanding -
Basic 6,720,338 6,653,505 6,719,961 6,585,182
========== ============= ========== ==========
Earnings per
share - Diluted $0.33 $0.31 6% $0.95 $0.87 9%
========== ============= ========== ==========
Wtd. Avg. shares
outstanding -
Diluted 7,136,607 7,088,900 7,140,913 7,112,243
========== ============= ========== ==========
(a) Per share data for the quarter ended September 30, 2003 has
been retroactively adjusted for stock dividends paid subsequent to
December 31, 2003.
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,
------------------- Percentage
2004 2003 Change
--------- --------- ----------
(Dollars in thousands,
except per share data)
-------------------
ASSETS:
Noninterest earning demand deposits and
cash on hand $32,561 $37,314
Federal funds sold and overnight
repurchase agreements 32,900 17,500
Interest-earning deposits 8,021 9,108
--------- ---------
Total Cash and Cash Equivalents 73,482 63,922 15%
Securities available for sale 164,720 139,011
Securities held to maturity 6,316 9,480
--------- ---------
Total Securities 171,036 148,491 15%
Loans and leases receivable 478,903 452,212 6%
Reserve for loan losses (4,981) (4,812)
--------- ---------
Loans & Leases Receivable, Net 473,922 447,400 6%
Accrued interest receivable 2,900 2,574
Other real estate owned -- --
Premises and equipment 4,806 5,019
Federal Home Loan Bank (FHLB) stock,
at cost 3,428 370
Federal Reserve Bank (FRB) stock,
at cost 351 229
Other assets 17,478 15,423
--------- ---------
TOTAL ASSETS $747,403 $683,428 9%
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Non-interest bearing demand deposits $250,050 $223,671
Savings & NOW deposits 162,000 151,367
Money market deposits 191,865 156,984
Time deposits 66,231 77,987
--------- ---------
Total Deposits 670,146 610,009 10%
Accrued employee benefits 3,326 2,957
Accrued interest and other liabilities 1,502 1,912
Other debt 8,248 8,248
--------- ---------
Total Liabilities 683,222 623,126 10%
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 67,474 54,317
Retained earnings (2,938) 5,499
Accumulated other comprehensive income
net of taxes (362) 480
--------- ---------
Total Stockholders' Equity 64,181 60,302 6%
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $747,403 $683,428 9%
========= =========
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED FINANCIAL RATIOS
(Unaudited)
Three Months Nine Months
Ended(1) Ended(1)
September 30, September 30,
------------- -------------
2004 2003 2004 2003
------ ------ ------ ------
Return on average assets 1.28% 1.31% 1.24% 1.29%
Return on average equity 15.20% 14.86% 14.69% 14.17%
Efficiency ratio 63.10% 62.09% 63.85% 64.33%
Operating expense/average assets 3.20% 3.62% 3.20% 3.63%
Net interest margin 4.88% 5.40% 4.82% 5.29%
Tier 1 capital ratio 9.66% 10.02% 9.66% 10.02%
Risk adjusted capital ratio 14.08% 14.19% 14.08% 14.19%
(1) All ratios have been annualized
OTHER CONSOLIDATED FINANCIAL DATA
(Unaudited)
Three Months Ended Nine Month Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(Dollars in thousands)
---------------------------------------
Net loans and leases $473,922 $447,395 $473,922 $447,395
Non-performing/non-accrual
loans (1)
Amounts $141 $980 $141 $980
As a percentage of gross loans 0.03% 0.22% 0.03% 0.22%
Real estate owned - loans $-- $-- $-- $--
Total non-performing assets
Amounts $141 $980 $141 $980
As a percentage of total
assets 0.02% 0.14% 0.02% 0.14%
Loan loss reserves
Amounts $4,981 $4,817 $4,981 $4,817
As a percentage of gross loans 1.04% 1.07% 1.04% 1.07%
Loan loss provision $78 $200 $78 $300
Net charge-offs (recoveries) $8 $48 $(34) $41
(1) Non-Accrual loans are loans that have made no payments of
principal or interest for more than 90 days.
At September 30,
2004 2003
------ ------
Book Value Per Share(1) $9.55 $9.02
(1) Adjusted for stock dividends issued subsequent to December 31,
2003 and 2002.
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(In thousands)
---------------------------------------
ASSETS
Earning assets:
Interest-earning deposits $8,196 $8,937 $7,537 $7,818
Federal funds sold and
overnight repurchase
agreements 41,111 34,128 37,142 33,564
Investment securities 168,401 122,208 155,206 98,273
Loans and leases (net of
unearned income) 475,594 453,851 469,960 451,523
--------- --------- --------- ---------
Total earning assets 693,302 619,124 669,845 591,178
Loan loss reserve (4,992) (4,711) (4,971) (4,652)
Non-earning assets 61,089 57,776 64,374 53,724
--------- --------- --------- ---------
Total Assets $749,399 $672,189 $729,248 $640,250
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Savings and interest bearing
transaction accounts $353,739 $302,223 $340,936 $280,767
Certificates of deposit,
$100,000 or more 27,893 30,637 29,448 31,972
Other time deposits 39,990 48,422 41,469 49,415
--------- --------- --------- ---------
Total interest-bearing
deposits 421,622 381,282 411,853 362,154
Other interest-bearing
liabilities 8,248 8,248 8,248 8,248
--------- --------- --------- ---------
Total interest bearing
liabilities 429,870 389,530 420,101 370,402
Non-interest bearing
liabilities:
Demand deposits 251,701 218,930 242,146 207,040
Other non-interest bearing
liabilities 4,845 4,551 5,243 4,458
--------- --------- --------- ---------
Total liabilities 686,416 613,011 667,490 581,900
Stockholders' equity 62,983 59,178 61,758 58,350
--------- --------- --------- ---------
Total Liabilities and
Stockholders' Equity $749,399 $672,189 $729,248 $640,250
========= ========= ========= =========
CONTACT: Foothill Independent Bancorp
G. Langley, 626-963-8551