1st Capital Bancorp Announces First Quarter 2022 Financial Results

Rhea-AI Summary

1st Capital Bancorp (FISB) reported a 10.65% increase in net income for Q1 2022, totaling $2.09 million, up from $1.89 million in Q4 2021 and 36.12% from $1.54 million a year ago. Earnings per share (diluted) rose to $0.37. The bank's return on equity improved to 10.59%, with total assets at $1.01 billion and loans of $580.2 million. Nonperforming assets dropped to 0.01%. However, shareholder equity declined by 22.2% to $62.2 million due to unrealized losses in the investment portfolio.

Positive

• Net income increased 10.65% to $2.09 million YoY.
• Earnings per share (diluted) rose to $0.37.
• Return on average equity improved to 10.59%.
• Total assets reached $1.01 billion.
• Nonperforming assets reduced to 0.01%.

Negative

• Shareholders' equity decreased by 22.2% to $62.2 million.
• Unrealized losses in the investment portfolio increased significantly.

SALINAS, Calif., April 29, 2022 (GLOBE NEWSWIRE) -- 1st Capital Bancorp (the “Company”), (OTCQX: FISB), the $1.01 billion asset bank holding company and parent company of 1st Capital Bank (the “Bank”), today reported unaudited net income of $2.09 million for the quarter ended March 31, 2022, an increase of 10.65% compared to net income of $1.89 million for the quarter ended December 31, 2021, and an increase of 36.12% compared to net income of $1.54 million for the quarter ended March 31, 2021.

Financial Highlights
Performance highlights for the quarter ended March 31, 2022, as compared to the quarter ended December 31, 2021, and the quarter ended March 31, 2021:

• Earnings per share (diluted) were $0.37 for the first quarter of 2022, as compared to $0.33 and $0.27 for the quarters ended December 31, 2021 and March 31, 2021, respectively.
  
  
• For the quarter ended March 31, 2022, the Company's return on average equity was 10.59%, as compared to 9.46% and 8.29% for the quarters ended December 31, 2021 and March 31, 2021, respectively.
  
  
• For the quarter ended March 31, 2022, the Company’s return on average assets was 0.85%, as compared to 0.75% and 0.77% for the quarters ended December 31, 2021 and March 31, 2021, respectively.
  
  
• For the quarter ended March 31, 2022, the Company’s net interest margin was 3.40%, as compared to 3.17% and 3.55% for the quarters ended December 31, 2021 and March 31, 2021, respectively.
  
  
• Pretax, pre-provision income for the quarter ended March 31, 2022 totaled $2.8 million, as compared to $2.5 million and $2.1 million for the quarters ended December 31, 2021 and March 31, 2021, respectively.
  
  
• For the quarter ended March 31, 2022, the Company’s efficiency ratio was 65.75%, as compared to 68.01% and 69.69% for the quarters ended December 31, 2021 and March 31, 2021, respectively.
  
  
• The Company recorded no provision expense for the quarters ended March 31, 2022, December 31, 2021 and March 31, 2021.
  
  
• As of March 31, 2022, the Company’s nonperforming assets to total assets was .01%, as compared to 0.10% and 0.16% for the quarters ended December 31, 2021 and March 31, 2021, respectively.
  
  
• As of March 31, 2022, the Company reported total assets, total deposits, and total loans of $1.01 billion, $922.2 million, and $580.2 million, respectively.
  

“We are pleased with the positive trends in our operating performance,” commented Sam Jimenez, chief executive officer. “Our first quarter key metrics are indicative and consistent with this year’s expectations of net interest margin expansion, and high single to low double-digit percentage increases in EPS growth and return on shareholders’ equity.”

Net Interest Income and Net Interest Margin
The Company's first quarter 2022 net interest income increased $320 thousand, or 4.18%, to $7.99 million as compared with $7.67 million for the quarter ending December 31, 2021. Loan interest income, excluding PPP income, increased $329 thousand, or 5.36%, to $6.46 million for the quarter ending March 31, 2022 compared to $6.13 million for the quarter ending December 31, 2021. Interest and fee income related to PPP loans decreased $290 thousand to $433 thousand for the quarter ended March 31, 2022, compared to $723 thousand for the quarter ended December 31, 2021.

The Company's net interest margin increased by 23 basis points (bps), or 7.16%, to 3.40% when compared to 3.17% for the quarter ended December 31, 2021. This increase was primarily driven by the Company’s mix of average earning assets as cash was deployed into higher yielding loans and leases, and investment securities. Interest expense remained flat at $530 thousand for the quarters ended March 31, 2022 and December 31, 2021, including $169 thousand of interest expense associated with subordinated debt recognized in each period.

Provision for Loan Losses
Improving credit quality and stable economic conditions resulted in no loan loss provision in the quarters ended March 31, 2022, December 31, 2021 and March 31, 2021.

Noninterest Expenses
The Company's total non-interest expense increased $86 thousand, or 1.59%, to $5.47 million in the quarter ended March 31, 2022, compared to $5.38 million for the quarter ended December 31, 2021. This increase is attributed to a rise in salaries and benefits through increased benefit costs, vacation accruals, and payroll taxes. The increase in salary and benefit costs was partially offset by a decrease in professional services.

Balance Sheet Summary
The Company's total assets increased $6.70 million, or 0.67%, to $1.01 billion as compared to $999.4 million at December 31, 2021.

Total loans outstanding were $580.2 million as of March 31, 2022, representing a $16.0 million, or 2.83%, increase from the December 31, 2021 outstanding balance of $564.2 million. The increase includes a purchase of an $18.0 million lease pool and growth in commercial real estate originations, partially offset by a $10.5 million decline in construction loans outstanding, decreases in residential and consumer loan pool balances and $11.9 million in PPP loan forgiveness.

PPP loans outstanding were $13.34 million as of March 31, 2022, and included a deferred fee balance of $375 thousand. At December 31, 2021, PPP loans outstanding were $25.20 million and included a deferred fee balance of $765 thousand.

Loan type (dollars in thousands)	3/31/2022			% of Total Loans			3/31/2021			% of Total Loans			12/31/2021			% of Total Loans
Construction / land (including farmland)	$	17,738		3.1	%		$	19,331		3.3	%		$	28,260		5.0	%
Residential 1 to 4 units		58,191		10.0	%			87,736		15.1	%			61,209		10.8	%
Home equity lines of credit		5,555		1.0	%			5,400		0.9	%			6,087		1.1	%
Multifamily		78,291		13.5	%			84,942		14.6	%			82,231		14.6	%
Owner occupied commercial real estate		111,580		19.2	%			68,189		11.8	%			89,087		15.8	%
Investor commercial real estate		193,426		33.3	%			176,709		30.5	%			185,938		33.0	%
Commercial and industrial		41,859		7.2	%			49,314		8.5	%			40,298		7.1	%
Paycheck Protection Program		13,342		2.3	%			118,381		20.4	%			25,203		4.5	%
Leases		17,597		3.0	%			-		0.0	%			-		0.0	%
Other loans		42,631		7.3	%			9,434		1.6	%			45,927		8.1	%
Total loans		580,210		100.0	%			619,436		100.0	%			564,241		100.0	%
Allowance for loan losses		(8,424	)					(8,828	)					(8,579	)
Net loans held for investment	$	571,786					$	610,608					$	555,662

The investment portfolio increased $35.4 million to $369.2 million from a balance of $333.9 million at December 31, 2021. The unrealized loss associated with the Company’s available-for-sale investment security portfolio increased from $622 thousand at December 31, 2021 to $23.6 million at March 31, 2022 as market yields rose significantly in the first quarter of 2022 driving down market values.

Total deposits were $922.2 million as of March 31, 2022. This represents a $23.0 million, or 2.6% increase from the December 31, 2021 balance of $899.2 million. Growth in money market balances of $52.9 million drove deposit growth, offset by noninterest bearing balances declining $25.1 million. Noninterest-bearing balances comprised 47.6% and 51.6% of total deposit balances at March 31, 2022 and December 31, 2021, respectively.

Deposit type (dollars in thousands)	3/31/2022		% of Total Deposits			3/31/2021		% of Total Deposits			12/31/2021		% of Total Deposits
Interest bearing checking accounts	$	59,456	6.4	%		$	58,612	6.4	%		$	68,575	7.6	%
Money market		250,596	27.2	%			185,841	20.2	%			197,703	22.0	%
Savings		161,720	17.5	%			127,940	13.9	%			157,332	17.5	%
Time		11,520	1.2	%			14,317	1.6	%			11,559	1.3	%
Total interest-bearing deposits		483,291	52.4	%			386,710	49.1	%			435,169	48.4	%
Noninterest-bearing		438,914	47.6	%			401,123	50.9	%			463,990	51.6	%
Total deposits	$	922,205	100.0	%		$	787,833	100.0	%		$	899,159	100.0	%

Shareholder’s equity totaled $62.2 million at March 31, 2022, a decline of $17.8 million, or 22.2%, compared to $80.0 million at December 31, 2021. This is reflective of the increase in unrealized losses on the investment security portfolio, the impact of which flows through accumulated other comprehensive income, a component of equity.

Stock Repurchase Activity
The Company announced a Stock Repurchase Program on December 3, 2021 and subsequently has repurchased a total of 169,589 shares to date at a weighted average price of $15.19.

Asset Quality
At March 31, 2022, non-performing assets were 0.01% of the Company’s total assets, compared with 0.10% at December 31, 2021. The allowance for loan losses was 1.45% of outstanding loans at March 31, 2022, compared to 1.52% at December 31, 2021. The Company had $0 and $899 thousand in nonaccrual loans at March 31, 2022 and December 31, 2021, respectively. The Company recorded net charge-offs of $154 thousand in the quarter ended March 31, 2022 compared to $253 thousand in the quarter ended December 31, 2021. Charge-offs were within the purchased consumer loan pools.   

Asset Quality	3/31/2022			12/31/2021			3/31/2021
Loans past due 90 days or more and accruing interest	$	71		$	59		$	-
Other nonaccrual loans		-			899			1,299
Other real estate owned		-			-			-
Total nonperforming assets	$	71		$	958		$	1,299
Allowance for loan losses to total loans		1.45%			1.52%			1.46%
Allowance for loan losses to nonperforming loans		11864.79%			895.41%			678.68%
Nonaccrual loans to total loans		0.00%			0.16%			0.21%
Nonperforming assets to total assets		0.01%			0.10%			0.16%

As of March 31, 2022, the Company had no outstanding loan deferments or forbearances stemming from COVID-19.

1ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA - UNAUDITED
($ in 000s)
Assets		3/31/2022			3/31/2021			12/31/2021
Cash and due from banks		$	33,618		$	58,655		$	84,079
Available-for-sale securities, at fair value			369,238			181,201			333,869
Loans held for sale			--			--			--
Loans and leases held for investment			580,210			619,436			564,241
Allowance for loan and lease losses			(8,424	)		(8,828	)		(8,577	)
Net loans and leases held for investment			571,786			610,608			555,664
Other Assets			31,418			24,003			25,748
Total assets		$	1,006,060		$	874,467		$	999,360
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand deposits		$	438,914		$	401,123		$	463,990
Interest-bearing checking accounts			483,291			386,710			435,169
Total deposits			922,205			787,833			899,159
Subordinated debentures			14,682			--			14,663
Other borrowings			--			5,000			--
Other liabilities			6,942			7,250			5,540
Shareholders' equity			62,231			74,384			79,998
Total liabilities and shareholders' equity		$	1,006,060		$	874,467		$	999,360
Shares outstanding			5,503,555			5,571,545			5,609,141
Earnings per share basic		$	0.38		$	0.28		$	0.34
Earnings per share diluted		$	0.37		$	0.27		$	0.33
Nominal and tangible book value per share		$	11.31		$	13.35		$	14.26

1ST CAPITAL BANCORP

CONDENSED FINANCIAL DATA - UNAUDITED

($ in 000s)

	Three Months Ended
Operating Results Data	3/31/2022		3/31/2021		12/31/2021
Interest and dividend income
Loans	$	6,896	$	6,600	$	6,857
Investment securities		1,557		455		1,247
Federal Home Loan Bank stock		58		44		60
Other income		13		9		39
Total interest and dividend income		8,524		7,108		8,203
Interest expense		530		242		530
Net interest income		7,994		6,866		7,673
Provision for loan losses		-		-		-
Net interest income after provision for loan losses		7,994		6,866		7,673
Noninterest income		319		191		238
Noninterest expenses
Salaries and benefits expense		3,445		3,144		3,305
Occupancy expense		435		418		413
Data and item processing		263		251		260
Furniture and equipment		140		116		117
Professional services		169		178		248
Other		1,014		811		1,037
Total noninterest expenses		5,466		4,918		5,380
Income before provision for income taxes		2,847		2,139		2,531
Provision for income taxes		755		602		640
Net income	$	2,092	$	1,537	$	1,891

	Three Months Ended
Selected Average Balances	3/31/2022			3/31/2021			12/31/2021
Gross loans	$	569,997		$	615,088		$	561,207
Investment securities		362,328			124,642			317,032
Federal Home Loan Bank stock		3,948			3,534			3,948
Other interest earning assets		31,744			45,417			92,112
Total interest earning assets		968,017			788,681			974,299
Total assets		996,632			813,566			999,508
Interest bearing checking accounts		65,753			59,229			60,106
Money market		221,071			157,959			232,730
Savings		158,988			124,342			141,290
Time deposits		11,572			14,690			11,965
Total interest- bearing deposits		457,384			356,220			446,091
Noninterest bearing demand deposits		438,394			372,019			468,459
Total deposits		895,778			728,239			914,550
Subordinated debentures and other borrowings		14,669			5,000			14,651
Shareholders' equity	$	80,143		$	75,221		$	79,312
1ST CAPITAL BANCORP CONDENSED FINANCIAL DATA – UNAUDITED ($ in 000s)
				Three Months Ended
Selected Financial Ratios	3/31/2022			3/31/2021			12/31/2021
Return on average total assets		0.85	%		0.77	%		0.75		%
Return on average shareholders' equity		10.59	%		8.29	%		9.46		%
Net interest margin		3.40	%		3.55	%		3.17		%
Net interest income to average total assets		3.25	%		3.42	%		3.05		%
Efficiency ratio		65.75	%		69.69	%		68.01		%

Regulatory Capital and Ratios	3/31/2022			3/31/2021			12/31/2021
Common equity tier 1 capital	$	83,272		$	74,132		$	80,819
Tier 1 regulatory capital	$	83,272		$	74,132		$	80,819
Total regulatory capital	$	91,877		$	80,863		$	88,798
Tier 1 leverage ratio		8.36%			9.14%			8.09%
Common equity tier 1 risk-based capital ratio		11.49%			13.83%			12.82%
Tier 1 capital ratio		11.49%			13.83%			12.82%
Total risk-based capital ratio		12.67%			15.08%			14.07%

About 1st Capital Bancorp

1^st Capital Bancorp is the holding company for 1^st Capital Bank. The Bank’s primary target markets are commercial enterprises, professionals, real estate investors, family business entities, and residents along the Central Coast region of California. The Bank provides a wide range of credit products, including loans under various government programs such as those provided through the U.S. Small Business Administration and the U.S. Department of Agriculture. A full suite of deposit accounts also is furnished, complemented by robust cash management services. The Bank operates full service branch offices in Monterey, Salinas, King City, San Luis Obispo and Santa Cruz. The Bank’s corporate offices are located at 150 Main Street, Suite 150, Salinas, California 93901. The Bank’s website is www.1stCapital.bank. The main telephone number is 831.264.4000.
Member FDIC / Equal Opportunity Lender / SBA Preferred Lender

Forward-Looking Statements
Certain of the statements contained herein that are not historical facts are “forward-looking statements” within the meaning of and subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may contain words or phrases including, but not limited, to: “believe,” “expect,” “anticipate,” “intend,” “estimate,” “target,” “plans,” “may increase,” “may fluctuate,” “may result in,” “are projected,” and variations of those words and similar expressions. All such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause such a difference include, among other matters, changes in interest rates; economic conditions including inflation and real estate values in California and the Bank’s market areas; governmental regulation and legislation; credit quality; competition affecting the Bank’s businesses generally; the risk of natural disasters and future catastrophic events including pandemics, terrorist related incidents and other factors beyond the Bank’s control; and other factors. The Bank does not undertake, and specifically disclaims any obligation, to update or revise any forward-looking statements, whether to reflect new information, future events, or otherwise, except as required by law.

This news release is available at the www.1stCapital.bank internet site for no charge.

For further information, please contact:

Samuel D. Jimenez		Danelle Thomsen
Chief Executive Officer		Chief Financial Officer
831.264.4057 office		831-264-4014 office
Sam.Jimenez@1stCapitalBank.com		Danelle.Thomsen@1stCapitalBank.com

FAQ

What were 1st Capital Bancorp's earnings for Q1 2022?

1st Capital Bancorp reported a net income of $2.09 million for Q1 2022.

How much did earnings per share increase for FISB?

Earnings per share for 1st Capital Bancorp increased to $0.37 in Q1 2022.

What is the current return on equity for FISB?

The return on average equity for 1st Capital Bancorp is 10.59%.

How have nonperforming assets changed for 1st Capital Bancorp?

Nonperforming assets decreased to 0.01% as of March 31, 2022.

What is the current asset total for 1st Capital Bancorp?

1st Capital Bancorp reported total assets of $1.01 billion as of March 31, 2022.