1st Capital Bancorp Announces Third Quarter 2021 Results

Rhea-AI Summary

1st Capital Bancorp (OTCQX:FISB) reported net income of $2.26 million for Q3 2021, marking a 15.7% increase from Q2 2021 and 136.7% from Q3 2020. Earnings per share reached $0.40. Key metrics included a return on equity of 11.35%, return on assets of 0.92%, and a net interest margin of 3.26%. Total assets grew to $1.008 billion, with deposits increasing 37.81% year-over-year. Significant improvements in asset quality were noted with non-performing assets at 0.11%.

Positive

• Net income increased 15.7% quarter-over-quarter.
• Year-over-year earnings growth of 136.7%.
• Return on average equity improved to 11.35%.
• Total assets increased by $175 million or 21% year-to-date.
• Non-performing assets decreased to 0.11%.

Negative

• Total loans declined by 10.12% year-over-year.
• Net interest margin decreased by 19 basis points.

SALINAS, CA / ACCESSWIRE / October 29, 2021 / 1st Capital Bancorp (the "Company), (OTCQX:FISB), the $1 billion asset bank holding company and parent company of 1st Capital Bank (the "Bank"), today reported unaudited net income of $2.26 million for the three months ended September 30, 2021, an increase of 15.7% compared to net income of $1.95 million in the second quarter of 2021, and an increase of 136.7% compared to net income of $953 thousand in the third quarter of 2020. Earnings per share were $0.40 (diluted) for the third quarter of 2021, compared to $0.34 (diluted) for the prior quarter, and $0.17 (diluted) for the third quarter of 2020.

Financial Highlights

Performance highlights for the quarter ended September 30, 2021, as compared to the quarter ending September 30, 2020, and the quarter ending June 30, 2021:

• For the quarter ended September 30, 2021, the Company's return on average equity was 11.35%, as compared to 5.26% and 10.36% for the quarter ended September 30, 2020 and June 30, 2021, respectively.
• For the quarter ended September 30, 2021, the Company's return on average assets was 0.92%, as compared to 0.51% and 0.89% for the quarter ended September 30, 2020 and June 30, 2021, respectively.
• For the quarter ended September 30, 2021, the Company's net interest margin was 3.26%, as compared to 3.45% and 3.54% for the three months ended September 30, 2020 and June 30, 2021, respectively.
• For the quarter ended September 30, 2021, the Company's efficiency ratio was 60.58%, as compared to 69.88% and 64.79% for the three months ended September 30, 2020 and June 30, 2021, respectively.
• For the quarter ended September 30, 2021, the Company's provision expense for loan losses was $0, as compared to $650 thousand and $0 for the three months ended September 30, 2020 and June 30, 2021, respectively.
• As of September 30, 2021, the Company's nonperforming assets to total assets was 0.11%, as compared to 0.20% and 0.23% for the three months ended September 30, 2020 and June 30, 2021, respectively.
• As of September 30, 2021, the Company reported total assets, total deposits, and total loans of $1.008 billion, $911.7 million, and $565.0 million, respectively.

"We are pleased with our third quarter performance, especially in light of the challenging operating environment," commented Samuel D. Jimenez, chief executive officer. "We continue to experience significant deposit and corresponding asset growth. Total assets have increase by $175 million or 21% in the first three quarters of 2021. While organic core loan growth, excluding PPP, remains robust at an annualized growth rate of 8%, substantial excess liquidity remains, and has been deployed into higher yielding securities."

Net Interest Income and Net Interest Margin

The Company's third quarter 2021 net interest income increased $1.49 million or 23.94% as compared with the quarter ending September 30, 2020. This increase was driven by higher investment income, income generated by a $25 million consumer loan purchase in the second quarter of 2021, and increased revenue recognition from the Paycheck Protection Program (PPP) loans.

The Company's net interest margin decreased by 19 basis points (bps) or 5.51% when compared to the quarter ending September 30, 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.

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 quarter.

Provision for Loan Losses

The Company did not make any provisions for loan losses in the quarter ending September 30, 2021, as compared to $650 thousand in the quarter ending September 30, 2020. Uncertainty surrounding COVID-19, and the potential negative impact on our clients and asset quality dictated the provisions made in the same period a year ago. Improving economic conditions and diminished concern with the Company's asset quality eliminated the need for any additional loan loss provisions for the previous sequential four quarters.

Noninterest Expenses

The Company's third quarter 2021 non-interest expenses increased $274 thousand, or 6.0%, to $4.85 million in the third quarter of 2021, compared to $4.58 million for the third quarter of 2020. This increase is mostly due to a $150 thousand community relations donation to the Salinas Regional Sports Authority to expand on its vision to "develop, build and manage high quality facilities" for youth soccer in the Salinas area.

Balance Sheet Summary

The Company's total assets increased $56.8 million or 5.98% to $1.008 billion as compared to $950.7 million at June 30, 2021.

Total loans outstanding were $565.0 million as of September 30, 2021. This represents a $63.6 million decrease or 10.12% from the September 30, 2020 outstanding balance of $628.6 million. The decrease in loan level reflected 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 a $25 million consumer loan pool in May, 2021.

PPP loans outstanding were $42.4 million as of September 30, 2021, and included a deferred fee balance of $1.4 million. At September 30, 2020, PPP loans outstanding were $106.6 million and included a deferred fee balance of $2.5 million.

The investment portfolio increased $237.8 million to $297.5 million from an outstanding balance of $59.6 million as of September 30, 2020. Incoming cashflows from deposit growth and prepaying earning assets were significantly deployed in bonds. The majority of the investments were made in mortgage-backed securities, municipal securities, and floating rate securities.

Total deposits were $911.7 million as of September 30, 2021. This represents a $250.2 million increase or 37.81% from the September 30, 2020 outstanding balance of $661.6 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 $81.7 million or 32.65% of the total deposit growth over the 12 months ending on September 30, 2021. The balance of the deposit growth was distributed among interest-bearing deposit accounts with the exception of time deposits which decreased by $4.7 million to $12.4 million.

Asset Quality

At September 30, 2021, non-performing assets were 0.11% of the Company's total assets, compared with 0.23% at June 30, 2021. At September 30, 2021, the allowance for loan losses was 1.56% of outstanding loans, compared to 1.46% at June 30, 2021. The Bank recorded a $22 thousand charge-off in the third quarter related to the purchased consumer loan portfolio. The Bank recorded net recoveries of $12 thousand in each of the three quarters of 2021.

As of September 30, 2021, the Company does not have any outstanding loan deferments or forbearances stemming from COVID-19.

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 www.1stCapital.bank.

For further information, please contact:
Samuel D. Jimenez
Chief Executive Officer
831.264.4057
sam.jimenez@1stcapitalbank.com

1ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA - UNAUDITED
($000s, except per share data)

		For the Three Months Ended									For the Nine Months Ended
Operating Results Data		9/30/2021			9/30/2020			Change			9/30/2021			9/30/2020			Change
Interest income		$	8,210		$	6,437		$	1,773		$	23,119		$	19,187		$	3,932
Interest expense			495			212			283			1,033			775			258
Net interest income			7,715			6,225			1,490			22,086			18,412			3,674
Provision for loan losses			-			650			(650	)		-			2,125			(2,125	)
Noninterest income			294			326			(32	)		675			795			(120	)
Noninterest expenses			4,852			4,578			274			14,755			13,026			1,729
Income before provision for income taxes			3,157			1,323			1,834			8,006			4,056			3,950
Provision for income taxes			901			370			531			2,263			1,145			1,118
Net income		$	2,256		$	953		$	1,303		$	5,743		$	2,911		$	2,832

Assets		9/30/2021			6/30/2021			3/31/2021			12/31/2020
Cash and due from banks		$	9,668		$	17,876		$	11,497		$	9,304
Funds held at the Federal Reserve Bank			120,005			43,615			47,158			97,462
Available-for-sale securities, at fair value			297,456			264,572			181,201			106,214
Loans			565,031			608,101			619,436			605,154
Allowance for loan losses			(8,830	)		(8,840	)		(8,828	)		(8,816	)
Net loans			556,201			599,261			610,608			596,338
Other Assets			24,186			25,379			24,003			23,233
Total assets		$	1,007,516		$	950,703		$	874,467		$	832,551
Liabilities and Shareholders' Equity		9/30/2021			6/30/2021			3/31/2021			12/31/2020
Noninterest bearing demand deposits		$	438,445		$	412,108		$	401,123		$	386,711
Interest bearing checking accounts			72,867			57,421			58,612			65,686
Money market			252,256			241,164			185,841			159,509
Savings			135,736			129,176			127,940			121,148
Time			12,422			13,761			14,317			15,284
Interest bearing deposits			473,281			441,522			386,710			361,627
Total deposits			911,726			853,630			787,833			748,338
Other liabilities			17,309			19,779			12,249			9,880
Shareholders' equity			78,481			77,294			74,385			74,333
Total liabilities and shareholders' equity		$	1,007,516		$	950,703		$	874,467		$	832,551
Shares outstanding			5,587,878			5,581,848			5,571,545			5,570,021
Earnings per share basic		$	0.40		$	0.35		$	0.28		$	0.29
Earnings per share diluted		$	0.40		$	0.34		$	0.27		$	0.28
Nominal and tangible book value per share		$	14.04		$	13.85		$	13.35		$	13.35

1ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA - UNAUDITED
($000s, except per share data)

		For the Three Months Ended										For the Nine Months Ended
Operating Results Data		9/30/2021			9/30/2020			Change				9/30/2021			9/30/2020			Change
Interest income		$	8,210		$	6,437		$	1,773			$	23,119		$	19,187		$	3,932
Interest expense			495			212			283				1,033			775			258
Net interest income			7,715			6,225			1,490				22,086			18,412			3,674
Provision for loan losses			-			650			(650	)			-			2,125			(2,125	)
Noninterest income			294			326			(32	)			675			795			(120	)
Noninterest expenses			4,852			4,578			274				14,755			13,026			1,729
Income before provision for income taxes			3,157			1,323			1,834				8,006			4,056			3,950
Provision for income taxes			901			370			531				2,263			1,145			1,118
Net income		$	2,256		$	953		$	1,303			$	5,743		$	2,911		$	2,832

Assets	9/30/2021			6/30/2021			3/31/2021			12/31/2020
Cash and due from banks	$	9,668		$	17,876		$	11,497		$	9,304
Funds held at the Federal Reserve Bank		120,005			43,615			47,158			97,462
Available-for-sale securities, at fair value		297,456			264,572			181,201			106,214
Loans		565,031			608,101			619,436			605,154
Allowance for loan losses		(8,830	)		(8,840	)		(8,828	)		(8,816	)
Net loans		556,201			599,261			610,608			596,338
Other Assets		24,186			25,379			24,003			23,233
Total assets	$	1,007,516		$	950,703		$	874,467		$	832,551
Liabilities and Shareholders' Equity	9/30/2021			6/30/2021			3/31/2021			12/31/2020
Noninterest bearing demand deposits	$	438,445		$	412,108		$	401,123		$	386,711
Interest bearing checking accounts		72,867			57,421			58,612			65,686
Money market		252,256			241,164			185,841			159,509
Savings		135,736			129,176			127,940			121,148
Time		12,422			13,761			14,317			15,284
Interest bearing deposits		473,281			441,522			386,710			361,627
Total deposits		911,726			853,630			787,833			748,338
Other liabilities		17,309			19,779			12,249			9,880
Shareholders' equity		78,481			77,294			74,385			74,333
Total liabilities and shareholders' equity	$	1,007,516		$	950,703		$	874,467		$	832,551
Shares outstanding		5,587,878			5,581,848			5,571,545			5,570,021
Earnings per share basic	$	0.40		$	0.35		$	0.28		$	0.29
Earnings per share diluted	$	0.40		$	0.34		$	0.27		$	0.28
Nominal and tangible book value per share	$	14.04		$	13.85		$	13.35		$	13.35

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

Assets		9/30/2021			9/30/2020			6/30/2021			3/31/2021
Cash and due from banks		$	9,668		$	6,966		$	17,876		$	11,497
Funds held at the Federal Reserve Bank			120,005			38,715			43,615			47,158
Available-for-sale securities, at fair value			297,456			59,649			264,572			181,201
Loans held for sale			-			442			1,791			-
Construction/land (including farmland)			25,476			15,850			22,091			19,331
Residential 1 to 4 units			68,438			115,881			75,906			87,736
Home equity lines of credit			7,601			6,034			6,669			5,400
Multifamily			81,268			79,693			77,183			84,942
Owner occupied commercial real estate			80,166			70,935			81,972			68,189
Investor commercial real estate			185,001			173,557			172,776			176,709
Commercial and industrial			40,719			48,812			49,147			49,314
Paycheck Protection Program			42,414			106,559			84,866			118,381
Other loans			33,948			10,877			35,700			9,434
Total loans held for investment			565,031			628,198			606,310			619,436
Allowance for loan losses			(8,830	)		(8,804	)		(8,840	)		(8,828	)
Net loans held for investment			556,201			619,394			597,470			610,608
Other assets			24,186			23,856			25,379			24,003
Total assets		$	1,007,516		$	749,022		$	950,703		$	874,467
Liabilities and Shareholders' Equity		9/30/2021			9/30/2020			6/30/2021			3/31/2021
Noninterest bearing demand deposits		$	438,445		$	356,730		$	412,108		$	401,123
Interest bearing checking accounts			72,867			54,228			57,421			58,612
Money market			252,256			128,039			241,164			185,841
Savings			135,736			105,431			129,176			127,940
Time			12,422			17,147			13,761			14,317
Interest bearing deposits			473,281			304,845			441,522			386,710
Total deposits			911,726			661,575			853,630			787,833
Other liabilities			17,309			15,059			19,779			12,249
Shareholders' equity			78,481			72,388			77,294			74,385
Total liabilities and shareholders' equity		$	1,007,516		$	749,022		$	950,703		$	874,467

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

		Three Months Ended								Nine Months Ended
Operating Results Data		9/30/2021				9/30/2020				9/30/2021				9/30/2020
Loans		$	7,121			$	6,133			$	20,698			$	18,050
Investment securities			1,000				253				2,205				924
Federal Home Loan Bank stock			60				44				169				132
Other income			29				7				47				81
Interest expense			495				212				1,033				775
Net interest income			7,715				6,225				22,086				18,412
Provision for loan losses			-				650				-				2,125
Noninterest income			294				326				675				795
Salaries and benefits expense			2,737				2,704				9,103				7,921
Occupancy expense			422				390				1,230				1,106
Data and item processing			288				225				803				652
Furniture and equipment			119				127				349				507
Professional services			148				350				488				678
Other			1,138				782				2,782				2,162
Total noninterest expenses			4,852				4,578				14,755				13,026
Income before provision for income taxes			3,157				1,323				8,006				4,056
Provision for income taxes			901				370				2,263				1,145
Net income		$	2,256			$	953			$	5,743			$	2,911
Asset Quality		9/30/2021				6/30/2021				3/31/2021				12/31/2020
Loans past due 90 days or more and accruing interest		$	146			$	-			$	-			$	-
Nonaccrual restructured loans			-				-				-				-
Other nonaccrual loans			921				2,161				3,100				1,299
Other real estate owned			-				-				-				-
Total nonperforming assets		$	1,067			$	2,161			$	3,100			$	1,299
Allowance for loan losses to total loans			1.56	%			1.46	%			1.43	%			1.46	%
Allowance for loan losses to nonperforming loans			827.55	%			409.07	%			284.77	%			678.68	%
Nonaccrual loans to total loans			0.16	%			0.36	%			0.50	%			0.21	%
Nonperforming assets to total assets			0.11	%			0.23	%			0.35	%			0.16	%

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

	Three Months Ended		Nine Months Ended
Selected Average Balances	9/30/2021		9/30/2020		9/30/2021		9/30/2020
Gross loans	588,133		628,889		607,673		585,636
Investment securities	279,122		61,323		202,569		63,167
Federal Home Loan Bank stock	3,948		3,534		3,773		3,520
Other interest earning assets	80,909		24,815		52,335		22,939
Total interest earning assets	952,112		718,561		866,350		675,262
Total assets	977,147		741,263		891,336		699,085
Interest bearing checking accounts	64,009		47,246		60,931		44,381
Money market	232,979		127,094		197,320		137,364
Savings	134,724		105,548		128,742		103,340
Time deposits	13,534		17,748		14,163		18,784
Total interest bearing deposits	445,246		297,636		401,156		303,869
Noninterest bearing demand deposits	433,518		356,738		401,407		315,254
Total deposits	878,764		654,374		802,563		619,123
Borrowings	14,646		10,000		7,131		4,599
Shareholders' equity	78,824		71,849		76,552		70,285
	Three Months Ended				Nine Months Ended
Selected Financial Ratios	9/30/2021		9/30/2020		9/30/2021		9/30/2020
Return on average total assets	0.92	%	0.51	%	0.86	%	0.55	%
Return on average shareholders' equity	11.35	%	5.26	%	10.03	%	5.52	%
Net interest margin	3.26	%	3.45	%	3.44	%	3.64	%
Net interest income to average total assets	3.13	%	3.33	%	3.31	%	3.51	%
Efficiency ratio	60.58	%	69.88	%	64.82	%	67.82	%

		Three Months Ended								Nine Months Ended
Selected Average Balances		9/30/2021				9/30/2020				9/30/2021				9/30/2020
Gross loans		$	588,133			$	628,889			$	607,673			$	585,636
Investment securities			279,122				61,323				202,569				63,167
Federal Home Loan Bank stock			3,948				3,534				3,773				3,520
Other interest earning assets			80,909				24,815				52,335				22,939
Total interest earning assets		$	952,112			$	718,561			$	866,350			$	675,262
Total assets		$	977,147			$	741,263			$	891,336			$	699,085
Interest bearing checking accounts		$	64,009			$	47,246			$	60,931			$	44,381
Money market			232,979				127,094				197,320				137,364
Savings			134,724				105,548				128,742				103,340
Time deposits			13,534				17,748				14,163				18,784
Total interest bearing deposits			445,246				297,636				401,156				303,869
Noninterest bearing demand deposits			433,518				356,738				401,407				315,254
Total deposits		$	878,764			$	654,374			$	802,563			$	619,123
Borrowings		$	14,646			$	10,000			$	7,131			$	4,599
Shareholders' equity		$	78,824			$	71,849			$	76,552			$	70,285
Selected Financial Ratios		9/30/2021				9/30/2020				9/30/2021				9/30/2020
Return on average total assets			0.92	%			0.51	%			0.86	%			0.55	%
Return on average shareholders' equity			11.35	%			5.26	%			10.03	%			5.52	%
Net interest margin			3.26	%			3.45	%			3.44	%			3.64	%
Net interest income to average total assets			3.13	%			3.33	%			3.31	%			3.51	%
Efficiency ratio			60.58	%			69.88	%			64.82	%			67.82	%

Regulatory Capital and Ratios		9/30/2021				6/30/2021				3/31/2021				12/31/2020
Common equity tier 1 capital		$	78,702			$	76,158			$	74,132			$	72,461
Tier 1 regulatory capital		$	78,702			$	76,158			$	74,132			$	72,461
Total regulatory capital		$	86,122			$	83,518			$	80,863			$	78,957
Tier 1 leverage ratio			8.07	%			8.64	%			9.14	%			9.44	%
Common equity tier 1 risk based capital ratio			13.30	%			12.99	%			13.83	%			14.01	%
Tier 1 capital ratio			13.30	%			12.99	%			13.83	%			14.01	%
Total risk based capital ratio			14.55	%			14.24	%			15.08	%			15.27	%

SOURCE: 1st Capital Bank

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https://www.accesswire.com/670354/1st-Capital-Bancorp-Announces-Third-Quarter-2021-Results

FAQ

What was 1st Capital Bancorp's net income for Q3 2021?

1st Capital Bancorp reported a net income of $2.26 million for Q3 2021.

How much did the earnings per share increase for FISB in Q3 2021?

Earnings per share for FISB increased to $0.40 in Q3 2021.

What are the total assets reported by 1st Capital Bancorp as of September 30, 2021?

Total assets reported by 1st Capital Bancorp were $1.008 billion as of September 30, 2021.

How did 1st Capital Bancorp's deposits change from Q3 2020 to Q3 2021?

Deposits increased by 37.81% year-over-year from Q3 2020 to Q3 2021.

What was the non-performing assets ratio for FISB in Q3 2021?

The non-performing assets ratio for FISB was 0.11% in Q3 2021.