SAN JOSE, CA
-- (Marketwired)
-- 10/30/14
Focus Business Bank (OTCQB: FCSB) announced unaudited financial results for the quarter and nine-months ended September 30, 2014. Net income for the quarter and nine-months ended September 30, 2014 was $273,000 ($0.09/diluted share) and $838,000 ($0.29/per diluted share), respectively, compared to $241,000 ($0.08/per diluted share) and $555,000 ($0.19/per diluted share) for the quarter and nine-months ending September 30, 2013. The increases in net income for the quarter and nine-months ending September 30, 2014 compared to the same periods in 2013 were primarily attributable to growth in net interest income resulting from a significant increase in earning assets and an increase in non-interest income from gains on sales of SBA loans, partially offset by increases in operating expenses, the provision for loan losses and income taxes.
Chairman and Chief Executive Officer Richard L. Conniff commented on the September 30, 2014 results, "We are very pleased to report that year-to-date net income has increased 51% in 2014 compared to the same period in 2013. For the past two years, the Bank has invested heavily in its specialty business lines, particularly in providing services to condominium homeowner associations and public benefit companies. As a result of these efforts, core deposits have more than doubled, increasing by 131% between September 2012 and September 2014. The growth in earning assets that accompanied the increase in deposits positions the Bank for continued long term growth in earnings and shareholder value."
Balance Sheet Highlights as of September 30, 2014
- Total assets of $407.0 million at September 30, 2014 were an all time record high and represented an increase of 45% over September 30, 2013.
- Total loans of $170.7 million at September 30, 2014 were an all time record and 28% above September 30, 2013.
- Interest bearing deposits of $272.6 million at September 30, 2014 increased 58% from September 30, 2013.
- Non-interest bearing demand deposits of $104.7 million were 28% of total deposits at September 30, 2014 and increased 29% over September 30, 2013.
Assets and Liabilities
As a result of deposit growth, the Bank continues to maintain high levels of liquidity. The Bank's liquid assets, consisting of cash and due from banks, federal funds sold and investment securities, totaled $229.7 million, or 56% of total assets, at September 30, 2014 compared to $140.9 million, or 50% of total assets, at September 30, 2013. The loan to deposit ratio at September 30, 2014 was 45% compared to 49% at December 31, 2013 and 53% at September 30, 2013.
Mr. Conniff noted, "While Santa Clara County has one of the strongest economies in the nation it is also heavily banked. Focus Business Bank has identified local closely-held businesses as a market well suited to the Bank's high-touch approach built around long term relationships. We compliment our business banking with specialized services to condominium homeowner associations and public benefit companies. The Bank is extremely well positioned to meet the needs of these clients with creative lending and cash management solutions tailored to their individual needs."
Net Interest Income
Net interest income for the quarter and nine-months ended September 30, 2014 was $2.2 million and $6.3 million, respectively, compared to $1.7 million and $4.9 million for the same periods ended September 30, 2013. The increase in net interest income was directly related to the higher volume of earning assets funded by growth in deposits. The increase in net interest income attributable to higher volumes of earning assets was partially offset by decreases in the net interest margin related to a lower loan to deposit ratio and market interest rates which remain at historically low levels. The net interest margin for the quarter ended September 30, 2014 was 2.44% compared to 2.95% for the quarter ended September 30, 2013.
Non-interest Income
Non-interest income includes service charges and fees, securities gains and losses, SBA loan sales gains and loan servicing fees. Total non-interest income was $508,000 and $1,552,000 respectively, for the quarter and nine-months ended September 30, 2014 compared to $447,000 and $1,043,000 for the same periods ending September 30, 2013. The increase in non-interest income for the quarter and nine-months ended September 30, 2014 compared to the same periods the previous year relates primarily to gains on the sale of SBA loans in the secondary market. Gains on the sale of SBA loans totaled $279,000 and $957,000, respectively, for the three and nine month periods ended September 30, 2014, respectively, compared to $323,000 and $771,000 for the same periods ending September 30, 2013. Focus Business Bank is an SBA Preferred Lender and the origination and sale of SBA loans has been a material and recurring source of revenue for the Bank since operations commenced in 2007.
Non-Interest Expense
Non-interest expense for the quarter and nine-months ended September 30, 2014 was $2.2 million and $6.3 million, respectively, compared to $1.9 million and $5.2 million for the same periods ended September 30, 2013. The increase in non-interest expense is primarily attributable to the Bank's growth. FTEs increased from 29 at September 30, 2013 to 41 at September 30, 2014. The increase in headcount also resulted in higher occupancy expense as the Bank expanded its leased premises in mid-2013.
Asset Quality
At September 30, 2014, the Bank had no non-performing loans compared to $1.1 million at December 31, 2013 and no non-performing loans at September 30, 2013. The provision for loan losses for the quarter and nine-months ended September 30, 2014 was $25,000 and $200,000, respectively, compared to no provision for loan losses in 2013. At September 30, 2014, the reserve for loan losses was 1.51% of total loans, compared to 1.82% at December 31, 2013 and 1.90% at September 30, 2013.
At September 30, 2014, the Bank had other real estate owned of $575,000 representing two commercial real estate properties acquired through foreclosure. The properties are in the process of being sold.
Capital
Focus Business Bank has capital ratios in excess of the minimum regulatory requirements for a bank to be considered well capitalized. Regulatory capital ratios compared to the minimum ratios to be considered well capitalized are as follows:
Minimum to be
At September 30, considered
2014 well capitalized
------------------ ------------------
Tier-1 leverage 6.90% 5.00%
Tier-1 risk based capital 11.20% 6.00%
Total risk-based capital 12.32% 10.00%
The Bank has not participated in any government sponsored capital programs, including the Troubled Asset Relief Program ("TARP") or the Small Business Lending Fund ("SBLF").
About Focus Business Bank
Focus Business Bank is dedicated to meeting the banking needs of closely-held businesses and professionals in Santa Clara County. The Bank also serves not-for-profit organizations and condominium homeowner associations with expertise, market knowledge, products and services tailored to these specific industries. The Bank specializes in business cash management services and commercial loans of all types. The Bank's office is located at 10 Almaden Boulevard in downtown San Jose, California.
Forward-Looking Statements
This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning future growth and performance. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
Focus Business Bank
Unaudited Summary Financial Information
As of
----------------------------------
12 Month
BALANCE SHEET 30-Sep-14 31-Dec-13 30-Sep-13 % Change
---------- ---------- ---------- ---------
($ in ',000s except per share
data)
ASSETS
Cash and due from banks
Interest bearing $ 113,758 $ 89,507 $ 50,312 126%
Non-interest bearing 23,512 13,484 42,467 -45%
Federal funds sold 501 501 505 -1%
Investment securities 91,947 63,293 47,602 93%
Loans 170,684 140,342 134,315 27%
Allowance for loan losses (2,578) (2,548) (2,547) 1%
---------- ---------- ----------
Net Loans 168,106 137,794 131,768 28%
Other assets 9,227 8,080 8,257 12%
---------- ---------- ----------
TOTAL ASSETS $ 407,051 $ 312,659 $ 280,911 45%
========== ========== ==========
LIABILITIES
Deposits
Non-interest bearing $ 104,754 $ 94,661 $ 80,980 29%
Interest bearing 272,552 190,354 172,509 58%
---------- ---------- ----------
Total deposits 377,306 285,015 253,489 49%
Other liabilities 1,631 949 1,035 58%
---------- ---------- ----------
TOTAL LIABILITIES 378,937 285,964 254,524 49%
Stockholders' equity 28,114 26,695 26,387 7%
---------- ---------- ----------
LIABILITIES AND STOCKHOLDERS'
EQUITY $ 407,051 $ 312,659 $ 280,911 45%
========== ========== ==========
Shares outstanding 2,989,722 2,934,930 2,930,904
Book value / share $ 9.40 $ 9.10 $ 9.00 4%
Balance Sheet Ratios
Loan/deposit 45% 49% 53%
Non-interest/total deposit 28% 33% 32%
Regulatory Capital Ratios
Tier-1 leverage 6.90% 8.50% 9.12%
Tier-1 risk based capital 11.20% 13.58% 14.04%
Total risk-based capital 12.32% 14.84% 15.30%
Asset Quality Metrics
Non-performing loans $ - $ 1,098 $ -
Non-performing loans/total
loans 0.00% 0.78% 0.00%
ALLL/total loans 1.51% 1.82% 1.90%
Other real estate owned $ 575 $ - $ -
Focus Business Bank
Unaudited Summary Financial Information (cont.)
Quarters Ended Nine-months Ended
-------------------- --------------------
INCOME STATEMENT 30-Sep-14 30-Sep-13 30-Sep-14 30-Sep-13
--------- --------- --------- ---------
($ in ',000s except per share
data)
Interest income $ 2,317 $ 1,885 $ 6,824 $ 5,378
Interest expense 157 170 523 467
--------- --------- --------- ---------
Net interest income 2,160 1,715 6,301 4,911
Provision for loan losses 25 - 200
Non-interest income 508 447 1,552 1,043
Non-interest expense 2,197 1,854 6,296 5,161
--------- --------- --------- ---------
Pre-tax income 446 308 1,357 793
Income taxes 173 67 519 238
--------- --------- --------- ---------
Net income $ 273 $ 241 $ 838 $ 555
========= ========= ========= =========
Net income per diluted share $ 0.09 $ 0.08 0.28 $ 0.19
Performance Metrics
Net interest margin 2.44% 2.95% 2.59% 2.96%
Return on average assets 0.28% 0.35% 0.32% 0.30%
Return on average equity 3.86% 3.64% 4.06% 2.81%
Contact:
Richard L. Conniff
Chairman and Chief Executive Officer
408.200.8701
Email Contact
© 2024 Canjex Publishing Ltd. All rights reserved.