Exhibit 99.1
Foothill Independent Bancorp Reports Record Earnings in
Second Quarter of 2005; Net Profits up 25% and Earnings Per Share Total $0.31
GLENDORA, Calif.--(BUSINESS WIRE)--July 19, 2005--Foothill
Independent Bancorp (NASDAQ:FOOT), the holding company for Foothill
Independent Bank, today reported record profits in both the second
quarter and first half of 2005, aided by a growing loan portfolio and
substantial net interest margin expansion. Net income increased 25% to
$2.77 million, or $0.31 per diluted share in the quarter ended June
30, 2005, compared to $2.21 million, or $0.25 per diluted share in the
second quarter a year ago. For the first six months of 2005, net
income grew 22% to $5.38 million, or $0.60 per diluted share, compared
to $4.41 million, or $0.49 per diluted share in the first half of last
year.
"Our balance sheet management has contributed to three consecutive
quarters of net interest margin expansion," stated George Langley,
President and CEO. "We have continued to build our low-cost deposit
base, keeping our cost of funds relatively stable. However as interest
rates have increased, so have the yields on the adjustable rate loans
in our portfolio. We may see further margin expansion as long as
interest rates continue to rise at a reasonable pace." Foothill's net
interest margin increased to 5.21% in the second quarter, compared to
4.87% in the immediately preceding quarter of 2005 and 4.65% in the
second quarter a year ago. For the first half of 2005, net interest
margin increased to 5.04% up from 4.79% for the first half of 2004.
Performance measures all improved, reflecting Foothill's increases
in profitability over the last year. Annualized return on average
equity (ROE) improved to 16.5% in the second quarter of 2005, up from
14.5% in the same quarter last year. For the six months ended June 30,
2005, ROE improved to 16.3%, compared to 14.4% in the first half of
2004. Annualized return on average assets (ROA) grew to 1.37% for the
second quarter, up from 1.20% in the same period of 2004, and to 1.33%
for the first half of 2005, compared to 1.23% in the six-month period
ended June 30, 2004. The efficiency ratio improved to 62.1% in the
quarter and 62.0% for the six-month period ended June 30, 2005, from
63.7% and 64.3%, respectively, in 2004, due to the increases in net
interest income in the three and six month periods ended June 30,
2005.
"Excellent asset quality has become a hallmark of Foothill over
the years," Langley said. "We have remained diligent with our
underwriting standards, keeping credit costs at the absolute minimum."
Non-performing loans (NPLs) and non-performing assets (NPAs),
which are equal, were basically flat from a year ago at $186,000. NPLs
represented just 0.04% of total loans at June 30, 2005, unchanged from
a year ago. NPAs were 0.02% of assets at the end of the second quarter
of 2005, also unchanged from the middle of last year. Foothill
recorded net loan recoveries of $11,000 during the first six months of
2005, compared to net recoveries of $42,000 during the first six
months last year. The reserve for loan losses remained at $5.03
million at June 30, 2005, representing 0.98% of gross loans and far
exceeding NPAs.
"We are managing the growth in our loan portfolio to minimize risk
while still generating record profits," Langley said. "Reflecting the
continued success of our strategy to build core deposits, our
securities portfolio is up 20% from a year ago, although down slightly
since the end of the first quarter. Deploying some of the capital that
is currently committed to securities into higher-yielding loans, while
at the same time maintaining credit quality, continue to be priorities
for us."
Total securities grew to $195 million, compared to $162 million at
the end of the second quarter last year. Gross loans increased 8% to
$513 million at the end of June 2005, up from $474 million at June 30,
2004. Assets increased 7% to $799 million at June 30, 2005, compared
to $744 million a year earlier.
Total deposits increased 7% to $717 million at June 30, 2005,
compared to $671 million a year earlier. Core deposits, which consist
of no-cost demand and low-cost savings and money market deposits,
increased by $38 million over last year to $640 million at June 30,
2005. "During the second quarter of 2005, we advanced our strategy to
improve our net interest margin by allowing some of our higher priced,
longer term time deposits and more expensive money market deposits to
run off," Langley said. "We used some brokered deposits to meet
short-term liquidity needs, so time deposits were 13% higher than at
June 30 last year." Core deposits represented 89% of total deposits at
June 30, 2005, compared to 90% of total deposits at June 30, 2004.
Reflecting balance sheet management, low-cost deposit base, and
rising interest rate environment, interest income grew by $2.3 million
over the second quarter of last year, while interest expense increased
by only $321,000. As a result, net interest income increased 25% to
$9.66 million in the second quarter of 2005, compared to $7.70 million
in the same quarter of 2004. For the six-month period ended June 30,
2005, net interest income grew 20% to $18.6 million, compared to $15.6
million a year ago. Other operating income decreased to $1.34 million
in the quarter, from $1.42 million in the second quarter of 2004 and
in the six months ended June 30, 2005 decreased to $2.62 million from
$2.83 million in the first half of 2004.
Non-interest expenses increased 19% to $6.73 million in the second
quarter this year, compared to $5.67 million in the second quarter of
last year. For the six months ended June 30, 2005, such expenses
increased 13% to $13.0 million, from $11.5 million in the first six
months of last year. Those increases were the result of increased
salaries, performance bonuses, and additional accounting and legal
costs. However, despite those increases, the efficiency ratio improved
to 62.1% in the quarter and to 62.0% for the six-month period ended
June 30, 2005, from 63.7% and 64.3%, respectively, in the same
corresponding periods of 2004, as net interest income grew at a
greater rate than did non-interest expense.
Shareholders' equity grew to $67.7 million at June 30, 2005,
compared to $61.3 million a year earlier. Book value increased to
$7.98 per share at the end of the second quarter this year. By
comparison, book value per share at June 30, 2004, retroactively
adjusted for a 5-for-4 stock split effective on May 25, 2005, was
$7.30 per share. Capital ratios continue to be above the
"Well-Capitalized" guidelines established by the regulatory agencies.
The Tier 1 Leverage Ratio was 9.42% and the Total Risk-based Capital
Ratio was 13.83% at June 30, 2005.
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 the Securities Acts of 1933 and 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," or words of similar
meaning, or future or conditional verbs such as "will," "would,"
"should," "could," or "may." Forward-looking statements set forth our
expectations or beliefs regarding our future financial condition or
future financial performance, which are based on current information.
Our actual results in future periods could differ significantly from
our current estimates, expectations and beliefs, as set forth in this
Release, due to a number of risks and uncertainties that could affect
our business or operating results. Those risks and uncertainties
include, but are not limited to:
-- The risk of increased competition from other financial
institutions, which could require us to reduce the interest
rates we are able to charge on loans or to increase the
interest we must pay to attract or maintain deposits, either
or both of which could lead to reductions in our net interest
margin or net earnings.
-- The risk of adverse changes in national economic conditions or
changes in Federal Reserve Board monetary policies, which
could lead to reductions in interest rates and in our net
interest margins and to declines in loan demand or a weakening
in the financial ability of borrowers to meet their loan
obligations to us.
-- The risk of a significant decline in real property values in
Southern California which, because approximately 90% of our
loans are secured by real property, could result in a
deterioration in the performance of our loan portfolio and, as
a result, could require us to increase the provisions we must
make for potential loan losses and lead to increase in loan
write-offs, which would reduce our earnings and could
adversely affect our financial condition.
-- The risk that natural disasters, such as earthquakes or fires,
which are not uncommon in Southern California, or localized
economic downturns, could adversely affect our operating
results.
-- The risk of changes in federal and state bank regulatory
policies that might have the effect of reducing yields on
earning assets or increasing our operating costs.
-- The risk that growth initiatives, such as the addition of new
branches or possible acquisitions of other banks, would result
in increased operating costs and declines in our earnings, and
-- The risk that we may have to reduce or eliminate cash
dividends due to the occurrence of any of the foregoing
events.
Certain of those risks and uncertainties, as well as others, are
described more fully in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2004, 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
(Unaudited)
(Dollars in Thousands, Except Per Share Amount)
Three Months Six Months
Ended Per- Ended Per-
June 30, cent June 30, cent
--------------------- Change --------------------- Change
2005 2004 2005 2004
---------- ---------- ------ ---------- ---------- ------
Interest Income
Interest on
loans &
leases $9,014 $7,446 $17,282 $15,092
Interest on
securities 1,795 1,223 3,442 2,350
Interest on
federal
funds sold 228 84 400 166
Interest
other 26 30 73 54
---------- ---------- ---------- ----------
Total
Interest
Income 11,063 8,783 26% 21,197 17,662 20%
Interest
Expense
Deposits 1,096 992 2,155 1,916
Interest on
borrowings 309 92 429 184
---------- ---------- ---------- ----------
Total
Interest
Expense 1,405 1,084 30% 2,584 2,100 23%
---------- ----------
Net interest
Income 9,658 7,699 25% 18,613 15,562 20%
Provision for
loan losses -- -- -- --
---------- ---------- ---------- ----------
Net interest
income after
loan loss
provision 9,658 7,699 25% 18,613 15,562 20%
Other
Operating
Income
Fees on
deposits 1,106 1,290 2,144 2,557
Gain on
sales of
SBA loans -- 3 13 5
Other 233 123 464 272
---------- ---------- ---------- ----------
Total Other
Operating
Income 1,339 1,416 -5% 2,621 2,834 -8%
Operating
Expenses
Salaries and
employee
benefits 3,121 2,825 6,064 5,603
Occupancy
and
equipment 1,063 1,010 2,106 2,125
Other 2,550 1,831 4,798 3,781
---------- ---------- ---------- ----------
Total Other
Operating
Expenses 6,734 5,666 19% 12,968 11,509 13%
Income
before
taxes 4,263 3,449 8,266 6,887
Income taxes 1,498 1,242 2,890 2,476
NET
INCOME $2,765 $2,207 25% $5,376 $4,411 22%
========== ========== ========== ==========
Per Share
Data (1)
Earnings per
common
share -
Basic $0.33 $0.26 27% $0.64 $0.52 23%
========== ========== ========== ==========
Weighted
average
shares
outstanding
- Basic 8,468,801 8,402,166 8,447,598 8,399,240
========== ========== ========== ==========
Earnings per
common
share -
Diluted $0.31 $0.25 24% $0.60 $0.49 22%
========== ========== ========== ==========
Weighted
average
shares
outstanding
- Diluted 8,989,684 8,906,607 9,004,818 8,936,213
========== ========== ========== ==========
(1) Per share data for the three and six month periods ended June 30,
2004 have been retroactively adjusted to reflect a 5-for-4 stock split
that was effectuated on May 25, 2005.
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in Thousands, Except Per Share Amount)
June 30, Percentage
----------------- Change
2005 2004
--------- --------- ----------
ASSETS:
Noninterest earning demand deposits and
cash on hand $35,437 $39,253
Federal funds sold and overnight
repurchase agreements 27,000 36,700
Interest-earning deposits 1,487 8,218
--------- ---------
Total Cash and Cash Equivalents 63,924 84,171 -24%
Securities available for sale 187,648 155,601
Securities held to maturity 7,781 6,872
--------- ---------
Total Securities 195,429 162,473 20%
Loans and leases receivable 513,416 473,833 8%
Reserve For loan losses (5,027) (4,989)
--------- ---------
Loans & Leases Receivable, Net 508,389 468,844 8%
Accrued interest receivable 3,255 2,717
Other real estate owned -- --
Premises and equipment 4,684 4,872
Federal Home Loan Bank (FHLB) stock, at
cost 4,214 3,389
Federal Reserve Bank (FRB) stock, at
cost 348 351
Other assets 18,408 17,482
--------- ---------
TOTAL ASSETS $798,651 $744,299 7%
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Non-interest bearing demand deposits $288,273 $250,988
Savings & NOW deposits 166,788 160,407
Money market deposits 185,211 190,612
Time deposits 77,159 68,493
--------- ---------
Total Deposits 717,431 670,500 7%
Accrued employee benefits 3,547 3,239
Accrued interest and other liabilities 1,705 1,013
Other debt 8,248 8,248
--------- ---------
Total Liabilities 730,931 683,000 7%
STOCKHOLDERS' EQUITY:
Common stock $0.001 par value-
authorized: 25,000,000 shares;
issued and outstanding: 8,490,628 and
8,398,484 shares, respectively 7 7
Additional paid-in capital 68,240 67,458
Retained earnings 579 (4,458)
Accumulated other comprehensive income
net of taxes (1,106) (1,708)
--------- ---------
Total Stockholders' Equity 67,720 61,299 10%
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $798,651 $744,299 7%
========= =========
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
CONSOLIDATED FINANCIAL RATIOS AND OTHER CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------- --------------
2005 2004 2005 2004
------- ------ ------ ------
Financial Ratios:
Return on average assets(1) 1.37%(1) 1.20%(1) 1.33% 1.23%
Return on average equity(1) 16.48%(1) 14.54%(1) 16.31% 14.43%
Efficiency ratio(1) 62.13% 63.74% 62.03% 64.25%
Annualized operating expense/average
assets(1) 3.33%(1) 3.09%(1) 3.22% 3.20%
Net interest margin 5.21%(1) 4.65%(1) 5.04% 4.79%
Tier 1 capital ratio(1) 9.42% 9.62% 9.42% 9.62%
Risk adjusted capital ratio(1) 13.83% 13.94% 13.83% 13.94%
Other Consolidated Financial Data
Provision for loan losses $-- $-- $-- $--
Net charge-offs (recoveries) $(12) $(35) $(11) $(42)
(1) These ratios have been annualized.
At June 30,
-------------------
2005 2004
--------- ---------
(Dollars in
thousands,
Other Consolidated Financial Data (continued) except per share
amounts)
-------------------
Net loans and leases $508,389 $468,844
Non-performing/non-accrual loans(1)
Amounts $186 $185
As a percentage of gross loans 0.04% 0.04%
Real estate owned - loans $-- $--
Total non-performing assets
Amounts $186 $185
As a percentage of total assets 0.02% 0.02%
Loan loss reserves
Amounts $5,027 $4,989
As a percentage of gross loans 0.98% 1.05%
Book value per share $7.98 $7.30(2)
(1) Non-Accrual loans are loans that have made no payments of
principal or interest for more than 90 days.
(2) Retroactively adjusted for a 5-for-4 stock split effectuated on
May 25, 2005.
FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES
AVERAGE BALANCES
(Unaudited)
(Dollars in Thousands, Except Per Share Amount)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
ASSETS
Earning assets:
Interest-earning deposits $4,082 $7,820 $6,328 $7,204
Federal funds sold and
overnight repurchase
agreements 31,114 35,548 29,811 35,136
Investment securities 199,909 157,154 199,208 148,537
Loans and leases (net of
unearned income) 514,656 470,848 512,121 467,112
--------- --------- --------- ---------
Total earning assets 749,761 671,370 747,468 657,989
Loan loss reserve (5,022) (4,979) (5,020) (4,961)
Non-earning assets 64,782 66,606 63,712 65,864
--------- --------- --------- ---------
Total Assets $809,521 $732,997 $806,160 $718,892
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest-bearing liabilities:
Deposits:
Savings and interest
bearing transaction
accounts $359,423 $343,503 $367,906 $334,463
Certificates of deposit,
$100,000 or more 34,073 30,109 37,169 30,233
Other time deposits 38,915 40,938 36,768 42,217
--------- --------- --------- ---------
Total interest-bearing
deposits 432,411 414,550 441,843 406,913
Other interest-bearing
liabilities 31,124 8,000 19,860 8,000
--------- --------- --------- ---------
Total interest bearing
liabilities 463,535 422,550 461,703 414,913
Non-interest liabilities:
Demand deposits 273,382 244,820 272,939 237,386
Other non-interest
liabilities 5,470 4,880 5,602 5,447
--------- --------- --------- ---------
Total liabilities 742,387 672,250 740,244 657,746
Stockholders' equity 67,134 60,747 65,916 61,146
--------- --------- --------- ---------
Total Liabilities and
Stockholders' Equity $809,521 $732,997 $806,160 $718,892
CONTACT: Foothill Independent Bancorp
G. Langley, 626-963-8551