1st Capital Bancorp Announces Fourth Quarter 2021 Financial Results

Rhea-AI Summary

1st Capital Bancorp (OTCQX: FISB) reported a net income of $1.89 million for Q4 2021, a decline of 19.3% from Q3 2021, but an increase of 18.6% from Q4 2020. For the year, net income rose 69.4% to $7.6 million. Earnings per share diluted decreased to $0.33 in Q4 2021 from $0.40 in Q3 2021. The return on average equity was 9.39%, down from 11.35% in Q3 2021. The net interest margin dropped to 3.17%. Total assets reached $999.4 million, with total loans at $564.2 million, reflecting a 6.8% decrease year-over-year.

Positive

• Net income for 2021 increased 69.4% to $7.6 million.
• Earnings per share rose to $1.34 for 2021, up from $0.81 in 2020.
• Total deposits increased 20.2% year-over-year to $899.2 million.
• Nonperforming assets decreased to 0.10% of total assets.

Negative

• Net income for Q4 2021 declined 19.3% compared to Q3 2021.
• Return on average equity decreased to 9.39%, down from 11.35% in Q3 2021.
• Net interest margin decreased by 38 basis points year-over-year.

SALINAS, Calif., Jan. 31, 2022 (GLOBE NEWSWIRE) -- 1st Capital Bancorp (the “Company), (OTCQX: FISB), the $999.4 million asset bank holding company and parent company of 1st Capital Bank (the “Bank”), today reported unaudited net income of $1.89 million for the quarter ended December 31, 2021, a decrease of 19.3% compared to net income of $2.26 million in the third quarter of 2021, and an increase of 18.6% compared to net income of $1.59 million in the fourth quarter of 2020.

Net income for the year ended December 31, 2021 of $7.6 million increased 69.4% compared to net income for the year ended December 31, 2020.

Financial Highlights
Performance highlights for the quarter ended December 31, 2021, as compared to the quarter ending December 31, 2020, and the quarter ending September 30, 2021:

• For the quarter ended December 31, 2021, the Company's return on average equity was 9.39%, as compared to 8.60% and 11.35% for the quarters ended December 31, 2020 and September 30, 2021, respectively.
   
• For the quarter ended December 31, 2021, the Company’s return on average assets was 0.75%, as compared to 0.82% and 0.92% for the quarters ended December 31, 2020 and September 30, 2021, respectively.
   
• Earnings per share (diluted) were $0.33 for the fourth quarter of 2021, compared to $0.40 for the prior quarter, and $0.28 for the fourth quarter of 2020.
   
• For the quarter ended December 31, 2021, the Company’s net interest margin was 3.17%, as compared to 3.54% and 3.26% for the quarters ended December 31, 2020 and September 30, 2021, respectively.
   
• For the quarter ended December 31, 2021, the Company’s efficiency ratio was 68.01%, as compared to 67.65% and 60.58% for the quarters ended December 31, 2020 and September 30, 2021, respectively.
   
• The Company recorded $0 provision expense for the quarters ended December 31, 2021, December 31, 2020 and September 30, 2021.
   
• As of December 31, 2021, the Company’s nonperforming assets to total assets was 0.10%, as compared to 0.16% and 0.11% for the quarters ended December 31, 2020 and September 30, 2021, respectively.
   
• As of December 31, 2021, the Company reported total assets, total deposits, and total loans of $999.4 million, $899.2 million, and $564.2 million, respectively.

Performance highlights for the year ended December 31, 2021, as compared to the year ending December 31, 2020:

• The Company's return on average equity was 9.93% for the year ended December 31, 2021, as compared to 6.32% for the year ended December 31, 2020.
   
• The Company’s return on average assets was 0.83% for the year ended December 31, 2021, as compared to 0.63% for the year ended December 31, 2020.
   
• Earnings per share (diluted) increased $0.53 per share to $1.34 per share for the year ended December 31, 2021 from $0.81 per share for the year ended December 31, 2020.
   
• The Company’s net interest margin was 3.35% for the year ended December 31, 2021 as compared to 3.62% for the year ended December 31, 2020.
   
• The Company’s efficiency ratio was 65.65% for the year ended December 31, 2021 as compared to 67.77% for the year ended December 31, 2020.
   
• The Company recorded $0 provision expense for the year ended December 31, 2021 as compared to $2.1 million for the year ended December 31, 2020.

“We are pleased with our year over year performance,” commented Sam Jimenez, chief executive officer. “The strong balance sheet growth and solid operating metrics are substantially attributable to our PPP and core loan activities, and highly reflective of our Mission to provide sustainable value to our customers, communities, team members, and shareholders. As we settle into 2022, we are confident in our ability to uphold our Mission and sustain our performance.”

1^ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA – UNAUDITED
($000’S, except per share data)

	For the Three Months Ended						For the Year Ended
Operating Results Data	12/31/2021		12/31/2020		Change		12/30/2021		12/30/2020		Change
Interest income	$	8,203	$	6,852	$	1,351	$	31,322	$	26,039	$	5,283
Interest expense		530		226		304		1,563		1,001		562
Net interest income		7,673		6,626		1,047		29,759		25,038		4,721
Provision for loan losses		-		-		-		-		2,125		(2,125	)
Noninterest income		238		233		5		913		1,028		(115	)
Noninterest expenses		5,380		4,640		740		20,135		17,666		2,470
Income before provision for income taxes		2,531		2,219		312		10,537		6,276		4,261
Provision for income taxes		640		626		15		2,904		1,770		1,134
Net income	$	1,891	$	1,593	$	297	$	7,633	$	4,505	$	3,128

Assets		12/31/2021			9/30/2021			6/30/2021			12/31/2020
Cash and due from banks		$	6,768		$	9,668		$	17,876		$	9,304
Funds held at the Federal Reserve Bank			77,311			120,005			43,615			97,462
Available-for-sale securities, at fair value			333,869			297,456			264,572			106,214
Loans			564,241			565,031			608,101			605,154
Allowance for loan losses			(8,578	)		(8,830	)		(8,840	)		(8,816	)
Net loans			555,564			556,201			599,261			596,338
Other Assets			25,748			24,186			25,379			23,233
Total assets		$	999,360		$	1,007,516		$	950,703		$	832,551
Liabilities and Shareholders' Equity		12/31/2021			9/30/2021			6/30/2021			12/31/2020
Noninterest bearing demand deposits		$	463,990		$	438,446		$	412,108		$	386,710
Interest bearing checking accounts			68,575			72,867			57,421			65,686
Money market			197,703			252,255			241,164			159,510
Savings			157,332			135,736			129,176			121,148
Time			11,559			12,422			13,761			15,284
Interest bearing deposits			435,169			473,280			441,522			361,628
Total deposits			899,159			911,726			853,630			748,338
Other liabilities			20,203			17,309			19,779			9,880
Shareholders' equity			79,998			78,481			77,294			74,333
Total liabilities and shareholders' equity		$	999,360		$	1,007,516		$	950,703		$	832,551
Shares outstanding			5,609,141			5,587,878			5,581,848			5,570,021
Earnings per share basic		$	0.34		$	0.40		$	0.35		$	0.29
Earnings per share diluted		$	0.33		$	0.40		$	0.34		$	0.28
Nominal and tangible book value per share		$	14.26		$	14.04		$	13.85		$	13.35

Net Interest Income and Net Interest Margin
The Company's fourth quarter 2021 net interest income increased $1.0 million or 15.8% as compared with the quarter ending December 31, 2020. This increase was primarily driven by higher investment income.

The Company's net interest margin decreased by 38 basis points (bps) or 10.7% when compared to the quarter ending December 31, 2020. This decrease was primarily driven by the Company’s mix of average earning assets. Lower yielding average earning asset balances have grown at an exceeding rate relative to higher yielding average earning assets. Interest expense associated with the subordinated debt issued by the Company in 2021 also contributed to the net interest margin decrease in the fourth quarter of 2021 compared to the same quarter in 2020.

In general terms, prepaying and repricing higher yielding loans have been substantially replaced and supplemented with lower yielding investment securities purchased in the current year. The negative impact has been partially offset by higher yields resulting from fee recognition on PPP loan forgiveness, and to a lesser extent, the impact of the higher yielding consumer loans purchased during the second and fourth quarters.

Provision for Loan Losses
Stable credit quality and improving economic conditions resulted in $0 loan loss provision in the quarters ending December 31, 2021 and December 31, 2020.

Noninterest Expenses
The Company's fourth quarter 2021 non-interest expenses increased $740 thousand, or 16.0%, to $5.38 million in the fourth quarter of 2021, compared to $4.64 million for the fourth quarter of 2020. This increase is primarily due to increased salary and benefit costs related to filling four key leadership positions in the fourth quarter of 2021 and increased FDIC insurance costs associated with deposit growth.

Balance Sheet Summary
The Company's total assets marginally decreased $8.2 million or 0.8% to $999.4 million as compared to $1.007 billion at September 30, 2021.

Total loans outstanding were $564.2 million as of December 31, 2021. This represents a $40.9 million decrease or 6.8% from the December 31, 2020 outstanding balance of $605.2 million. The decrease in loan level reflects PPP loan forgiveness and payoff activity in the purchased residential loan portfolio, offset by an increase in originations of commercial real estate core loans, and the purchase of two consumer loan pools in the second and fourth quarters of 2021 with $36.6 million in outstanding balances at December 31, 2021.

PPP loans outstanding were $25.2 million as of December 31, 2021, and included a deferred fee balance of $765 thousand. At December 31, 2020, PPP loans outstanding were $90.4 million and included a deferred fee balance of $1.7 million.

The investment portfolio increased $227.7 million to $333.9 million from an outstanding balance of $106.2 million as of December 31, 2020. Incoming cashflows from deposit growth and prepaying earning assets were largely deployed in bonds. The majority of the investments were made in mortgage-backed and municipal securities.

Total deposits were $899.2 million as of December 31, 2021. This represents a $150.8 million increase or 20.2% from the December 31, 2020 outstanding balance of $748.3 million. A significant portion of this growth was associated with PPP loan proceeds deposited with the Bank. Growth in noninterest-bearing demand deposit accounts were $77.3 million or 51.2% of the total annual deposit growth. The balance of the deposit growth was distributed among interest-bearing deposit accounts with the exception of time deposits which decreased by $3.7 million to $11.6 million.

Asset Quality
At December 31, 2021, non-performing assets were 0.10% of the Company’s total assets, compared with 0.11% at September 30, 2021. At December 31, 2021, the allowance for loan losses was 1.52% of outstanding loans, compared to 1.56% at September 30, 2021. The Bank recorded $310 thousand in charge-offs in the fourth quarter related to the purchased consumer loan portfolio compared to $22 thousand in the quarter ended September 30, 2021. The Bank recorded net recoveries of $12 thousand in each of the first three quarters of 2021 and $58 thousand in the fourth quarter of 2021.

As of December 31, 2021, the Company does not have any outstanding loan deferments or forbearances stemming from COVID-19.

Stock Repurchase Activity
The Company announced a Stock Repurchase Program December 3, 2021 and subsequently repurchased a total of 57,089 shares through January 20, 2022 at a weighted average price of $14.91.

1ST CAPITAL BANCORP

CONDENSED FINANCIAL DATA - UNAUDITED

($ in 000s)

Asset Quality	12/31/2021			9/30/2021			6/30/2021			12/31/2020
Loans past due 90 days or more and accruing interest	$	59		$	146		$	-		$	-
Other nonaccrual loans		899			921			2,161			1,299
Other real estate owned		-			-			-			-
Total nonperforming assets	$	958		$	1,067		$	2,161		$	1,299
Allowance for loan losses to total loans		1.52	%		1.56	%		1.46	%		1.46	%
Allowance for loan losses to nonperforming loans		895.41	%		827.55	%		409.07	%		679.60	%
Nonaccrual loans to total loans		0.16	%		0.16	%		0.36	%		0.21	%
Nonperforming assets to total assets		0.10	%		0.11	%		0.23	%		0.16	%

1ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA - UNAUDITED
($ in 000s)
	Three Months Ended				Year Ended
Operating Results Data	12/31/2021		12/31/2020		12/31/2021		12/31/2020
Interest and dividend income
Loans	$	6,857	$	6,530	$	27,555	$	24,581
Investment securities		1,247		266		3,452		1,190
Federal Home Loan Bank stock		60		44		230		176
Other income		39		12		85		92
Total interest and dividend income		8,203		6,852		31,322		26,039
Interest expense		530		226		1,563		1,001
Net interest income		7,673		6,626		29,759		25,038
Provision for loan losses		-		-		-		2,125
Net interest income after provision for loan losses		7,673		6,626		29,759		22,913
Noninterest income		238		233		913		1,028
Noninterest expenses
Salaries and benefits expense		3,305		2,937		12,408		10,858
Occupancy expense		413		408		1,643		1,515
Data and item processing		260		249		1,064		901
Furniture and equipment		117		131		466		638
Professional services		248		123		736		802
Other		1,037		792		3,818		2,952
Total noninterest expenses		5,380		4,640		20,135		17,666
Income before provision for income taxes		2,531		2,219		10,537		6,275
Provision for income taxes		640		626		2,904		1,770
Net income	$	1,891	$	1,593	$	7,633	$	4,505

1ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA - UNAUDITED
($ in 000s)

Assets	12/31/2021				9/30/2021				6/30/2021				12/31/2020
Cash and due from banks	$	6,768			$	9,668			$	17,876			$	9,304
Funds held at the Federal Reserve Bank		77,311				120,005				43,615				97,462
Available-for-sale securities, at fair value		333,869				297,456				264,572				106,214
Loans held for sale		-				-				1,791				-
Loans held for investment
Construction/land (including farmland)		28,260				25,476				22,091				17,097
Residential 1 to 4 units		61,209				68,438				75,906				102,688
Home equity lines of credit		6,087				7,601				6,669				5,955
Multifamily		82,231				81,268				77,183				84,704
Owner occupied commercial real estate		89,087				80,166				81,972				72,427
Investor commercial real estate		185,939				185,001				172,776				174,437
Commercial and industrial		40,298				40,719				49,147				47,550
Paycheck Protection Program		25,203				42,414				84,866				90,382
Other loans		45,927				33,948				35,700				9,914
Total loans held for investment		564,241				565,031				606,310				605,154
Allowance for loan losses		(8,578	)			(8,830	)			(8,840	)			(8,816	)
Net loans held for investment		555,663				556,201				597,470				596,338
Other assets		25,748				24,186				25,379				23,233
Total assets	$	999,360			$	1,007,516			$	950,703			$	832,551
Liabilities and Shareholders' Equity
Noninterest bearing demand deposits	$	463,990			$	438,446			$	412,108			$	386,710
Interest bearing checking accounts		68,575				72,867				57,421				65,686
Money market		197,703				252,255				241,164				159,509
Savings		157,332				135,736				129,176				121,148
Time		11,559				12,422				13,761				15,284
Interest bearing deposits		435,169				473,280				441,523				361,628
Total deposits		899,159				911,726				853,631				748,338
Other liabilities		20,203				17,309				19,779				9,880
Shareholders' equity		79,998				78,481				77,294				74,333
Total liabilities and shareholders' equity	$	999,360			$	1,007,516			$	950,703			$	832,551

1^ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA – UNAUDITED
($000’s)

		Three Months Ended			Year Ended
Selected Average Balances		12/30/2021		12/30/2020	12/31/2021	12/31/2020
Gross loans		$ 561,207		$ 618,458	$595,961	$ 593,887
Investment securities		317,032		75,020	231,420	66,146
Federal Home Loan Bank stock		3,948		3,534	3,818	3,396
Other interest earning assets		92,112		46,969	58,474	28,979
Total interest earning assets		$ 974,299		$ 743,981	$ 889,673	$ 692,408
Total assets		$ 999,508		$ 769,694	$ 891,336	$ 716,834
Interest bearing checking accounts		$ 60,106		$ 54,120	$ 60,738	$ 46,821
Money market		232,730		136,535	206,320	137,155
Savings		141,290		111,468	131,905	105,383
Time deposits		11,965		15,937	13,609	18,068
Total interest- bearing deposits		446,091		318,060	412,572	307,427
Noninterest bearing demand deposits		468,459		364,571	422,417	327,651
Total deposits		$ 914,550		$ 682,631	$ 834,989	$ 635,078
Borrowings		$ 14,651		$ 8,261	$ 7,657	$ 5,519
Shareholders' equity		$ 79,312		$ 73,488	$ 76,892	$ 71,090
		Three Months Ended			Year Ended
Selected Financial Ratios		12/31/2021		12/31/2020	12/31/2021	12/31/2020
Return on average total assets		0.75%		0.82%	0.83%	0.63%
Return on average shareholders' equity		9.46%		8.60%	9.93%	6.32%
Net interest margin		3.17%		3.54%	3.35%	3.62%
Net interest income to average total assets		3.05%		3.42%	3.24%	3.48%
Efficiency ratio		68.01%		67.65%	65.65%	67.77%

Regulatory Capital and Ratios	12/31/2021			9/30/2021			6/30/2021			12/31/2020
Common equity tier 1 capital	$	80,819		$	78,702		$	76,158		$	72,461
Tier 1 regulatory capital	$	80,819		$	78,702		$	76,158		$	72,461
Total regulatory capital	$	88,798		$	86,122		$	83,518		$	78,957
Tier 1 leverage ratio		8.09	%		8.07	%		8.64	%		9.44	%
Common equity tier 1 risk-based capital ratio		12.82	%		13.30	%		12.99	%		14.01	%
Tier 1 capital ratio		12.82	%		13.30	%		12.99	%		14.01	%
Total risk-based capital ratio		14.07	%		14.55	%		14.24	%		15.27	%

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
Chief Executive Officer
831.264.4057 office
Sam.Jimenez@1stCapitalBank.com

 

FAQ

What was 1st Capital Bancorp's net income for Q4 2021?

1st Capital Bancorp reported a net income of $1.89 million for Q4 2021.

How did earnings per share change for 1st Capital Bancorp in 2021?

Earnings per share increased to $1.34 in 2021 from $0.81 in 2020.

What is the financial outlook for 1st Capital Bancorp in 2022?

The company expressed confidence in sustaining performance and growth into 2022.

What was the total asset value for 1st Capital Bancorp as of December 31, 2021?

Total assets were reported at $999.4 million.