From the Wires
1st Enterprise Bank Announces Net Income of $3.7 Million for 2012, an Increase of 18% Over 2011
Jan. 31, 2013 01:31 PM
LOS ANGELES, CA -- (Marketwire) -- 01/31/13 -- 1st Enterprise Bank ("the Bank") (OTCBB: FENB), an independent full-service commercial bank serving the Southern California business community, announced full year net income of $3.7 million for 2012, an 18% increase over 2011.
Financial Highlights
- Net income for 2012 was $3,732,000, an 18% increase over 2011 net income of $3,152,000
- Diluted earnings per common share were $.98 for 2012, compared to $.85 in 2011
- Net income was $1,230,000 for the fourth quarter of 2012, a 28% increase over the fourth quarter of 2011 and a 90% increase over the third quarter of 2012
- Diluted earnings per common share were $.29 for the fourth quarter, compared to $.32 for the fourth quarter of 2011 and $.15 for the third quarter of 2012
- Total Assets grew by 25% in 2012, ending the year at $706 million
- Total Loans outstanding grew by 40% in 2012, ending the year at $409 million
- Total Deposits grew by 23% in 2012, ending the year at $612 million
- The Bank continues to be well capitalized with a Tier 1 Leverage Ratio of 9.4% and Total Risk Based Capital Ratio of 13.2%
John Black, CEO, stated, "We are pleased to announce that 1st Enterprise Bank achieved record full year earnings of $3.7 million in 2012 and record quarterly earnings of $1.2 million in the fourth quarter. The Bank continued to generate strong growth in both loans and deposits, as loans grew by an annualized rate of 29% and deposits grew by 14%, during the fourth quarter of 2012. Net interest income continued to grow, as reflected in the 25% increase over the prior year. Excluding gain on the sale of securities, the Bank grew non-interest income by 42%. In addition to our strong financial performance during 2012, we also were successful in adding five highly experienced bankers to our team. They included two experienced commercial relationship managers that will open and lead our new San Fernando regional loan production office opening in March of this year."
Net interest income before provision was $18.9 million in 2012, a $3.9 million or 26% increase over the prior year. The growth in net interest income was the result of both growth in earning assets and an increase in net interest margin. Earning assets grew by $93 million or 19% over 2011. Net interest margin increased from 3.03% in 2011 to 3.23% in 2012, as a result of both an increase in the earning asset yield and a decrease in the Bank's cost of funds. The provision for loan loss was $1,508,000 in 2012, a $373,000 increase over 2011. Net loan charge-offs for 2012 and for the fourth quarter totaled $598,000 and non-accrual loans totaled $471,000 at December 31, 2012. "While we were disappointed to have experienced our first charge-off and non-accrual loans (all related to the same borrower), these levels are still far below industry averages, as reflected in the net charge-off ratio of 0.17% for all of 2012 and a non-performing asset ratio of 0.44% at year end," stated Mr. Black.
Non-interest income, excluding gain on sale of securities was $3.1 million in 2012, an increase of more than $900,000 or 42% over 2011. Gain on sale of securities was approximately $900,000 in 2012, a 24% decline from the $1.2 million in gains recorded in 2011.
Non-interest expense grew by $3 million over 2011 to $16 million for 2012. The majority of this growth was attributable to increased staff and benefit expense as the Bank continued to expand its staffing levels to maintain high levels of customer service and to accommodate continued growth in the coming years.
For the three months ended December 31, 2012, net interest income before provision was $5.1 million, an increase of more than $1 million or 25% compared to the fourth quarter of 2011 and an increase of more than $300,000 or 6% compared to the third quarter of 2012. The growth in net interest income was the result of both growth in earning assets and an increase in net interest margin. Average earning assets were $649 million in the fourth quarter of 2012, a 22% increase over the prior year and a 4% increase from the prior quarter. Net interest margin was 3.13% for the fourth quarter, compared to 3.04% and 3.08% for the prior year and prior quarter, respectively. The increase in net interest margin resulted from both an increase in the earning asset yield and a decrease in the Bank's cost of funds. The provision for loan loss was $513,000 in the fourth quarter of 2012 compared to $565,000 in the fourth quarter of 2011 and $745,000 in the third quarter of 2012.
Non-interest income was $1.4 million in the fourth quarter of 2012, including gains on sale of securities of $629,000. Excluding the gains, non-interest income declined by $36,000 and $194,000 over the prior year and prior quarter, respectively. Non-interest expense in the fourth quarter of 2012 grew by more than $800,000 or 26% over 2011, but grew by only 2% over the third quarter of 2012.
Brian Horton, President, concluded, "We are very pleased with these results and the Bank's ability to successfully navigate the economic headwinds that we have faced the last five years. We want to thank our loyal staff for their efforts and our loyal customers, because they are the drivers of our success."
About 1st Enterprise Bank
Founded in 2006, 1st Enterprise Bank is a full service commercial banking institution, whose highly experienced bankers personally serve Southern California entrepreneurial businesses, professional firms and nonprofit organizations, along with their owners and key managers. Headquartered in the Los Angeles financial district, with full service regional banking offices in Irvine and Ontario, 1st Enterprise Bank offers a full range of credit and depository services, with special emphasis on superior customer service, sophisticated cash management services and direct access to bank decision makers. Customers work directly with a dedicated Relationship Manager, a seasoned professional who understands their unique challenges serving as a sounding board and an active participant in their client's success. For more information on 1st Enterprise Bank, please visit www.1stenterprisebank.com.
Forward-Looking Statement:
This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about 1st Enterprise Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: 1st Enterprise Bank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in 1st Enterprise Bank's reports and filings with banking regulatory agencies. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and 1st Enterprise Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
1st Enterprise Bank
Condensed Statements of Financial Condition
$000
Unaudited Unaudited Audited
----------- ----------- -----------
Assets 12/31/2012 9/30/2012 12/31/2011
----------- ----------- -----------
Cash and due from banks $ 14,520 $ 21,058 17,344
Interest earning deposits in other
banks 23,386 15,357 8,389
----------- ----------- -----------
Total cash and cash equivalents 37,906 36,415 25,733
Certificates of deposit in other
banks 2,490 498 5,522
Investment securities - available-
for-sale 180,491 167,518 173,155
Investment securities - held-to-
maturity 56,026 56,114 53,127
Loans, net of deferred loan fees 408,767 381,307 292,587
Allowance for loan losses (5,510) (5,595) (4,600)
----------- ----------- -----------
Loans, net of allowance for loan
losses 403,257 375,712 287,987
Bank owned life insurance 13,389 13,276 10,462
Premises and equipment, net 2,256 2,274 2,464
Accrued interest receivable and
other assets 10,323 10,022 8,611
----------- ----------- -----------
Total Assets $ 706,138 $ 661,829 $ 567,061
=========== =========== ===========
Liabilities
Non-interest-bearing demand
deposits $ 286,800 $ 273,197 $ 215,355
Interest bearing transaction
accounts 39,428 43,884 37,075
Money market and savings accounts 274,088 264,056 233,537
Time deposits 11,784 10,739 10,976
----------- ----------- -----------
Total Deposits 612,100 591,876 496,943
Federal Home Loan Bank Borrowings 24,000 - 17,000
Other liabilities 4,647 4,913 2,881
----------- ----------- -----------
Total Liabilities 640,747 596,789 516,824
Shareholders' Equity
Serial Preferred Stock 16,380 16,380 16,380
Common Stock 43,034 43,008 30,958
Retained Earnings 4,942 3,752 1,374
Accumulated other comprehensive
income 1,035 1,900 1,525
----------- ----------- -----------
Total Shareholders' Equity 65,391 65,040 50,237
----------- ----------- -----------
Total Liabilities and Shareholders'
Equity $ 706,138 $ 661,829 $ 567,061
=========== =========== ===========
1st Enterprise Bank
Condensed Statements of Operations
$000
For the Years Ended
----------------------------
Unaudited Audited
------------- -------------
12/31/2012 12/31/2011
------------- -------------
Interest Income
Interest and fees on loans $ 15,355 $ 11,536
Interest on investment securities 4,141 4,423
Other interest income 90 149
------------- -------------
Total interest income 19,586 16,108
Interest Expense 723 1,120
------------- -------------
Net Interest Income 18,862 14,988
Provision for loan losses 1,508 1,135
------------- -------------
Net Interest Income After Provision for Loan
Losses 17,355 13,853
Non-interest Income
Service charges, fees and other income 3,138 2,210
Gain on sale of investment sercurities 899 1,177
------------- -------------
Total non-interest Income 4,037 3,387
Non-interest Expenses
Compensation and benefit expenses 9,663 7,513
Occupancy and equipment expenses 1,443 1,325
Data processing 1,007 818
Professional and legal 1,269 1,226
Other operating expenses 2,683 2,138
------------- -------------
Total non-interest expense 16,065 13,020
Income Before Income Taxes 5,327 4,220
------------- -------------
Provision for income taxes 1,595 1,067
------------- -------------
Net Income $ 3,732 $ 3,152
============= =============
Preferred dividends & Warrant amortization 164 655
------------- -------------
Net Income Applicable to Common Shareholders $ 3,568 $ 2,497
============= =============
Earnings Per Share
Basic earnings per share $ 1.04 $ 0.89
Diluted earnings per share $ 0.98 $ 0.85
Average shares outstanding 3,431,886 2,818,497
Average fully diluted shares 3,622,251 2,951,985
Total Shares outstanding at end of period 3,815,089 2,848,500
Capital Ratios
Tier 1 leverage ratio 9.4% 8.5%
Tier 1 risk-based capital ratio 12.1% 12.0%
Total risk-based capital ratio 13.2% 13.2%
Book value per share $ 12.85 $ 11.89
Performance Ratios
Return on average assets 0.60% 0.59%
Return on average common equity 8.17% 7.62%
Net interest margin 3.23% 3.03%
Cost of Funds 0.13% 0.23%
Efficiency ratio 70.16% 70.86%
Average Balances
Total Assets $ 626,527 $ 534,397
Earning Assets 584,500 491,909
Total Loans 343,601 245,632
Total Securities 212,171 229,754
Total Deposits 560,741 484,172
Common Equity 43,677 32,774
1st Enterprise Bank
Condensed Statements of Operations
$000
Three Months Ended
-------------------------------------
Unaudited
-------------------------------------
12/31/2012 9/30/2012 12/31/2011
----------- ----------- -----------
Interest Income
Interest and fees on loans $ 4,291 $ 3,957 $ 3,150
Interest on investment securities 963 987 1,136
Other interest income 23 35 18
----------- ----------- -----------
Total interest income 5,277 4,979 4,304
Interest Expense 174 179 231
----------- ----------- -----------
Net Interest Income 5,103 4,800 4,073
Provision for loan losses 513 745 565
----------- ----------- -----------
Net Interest Income After Provision
for Loan Losses 4,590 4,055 3,508
Non-interest Income
Service charges, fees and other
income 733 927 769
Gain on sale of investment
sercurities 629 18 0
----------- ----------- -----------
Total non-interest Income 1,362 945 769
Non-interest Expenses
Compensation and benefit expenses 2,543 2,341 1,912
Occupancy and equipment expenses 364 359 352
Data processing 268 278 222
Professional and legal 318 417 368
Other operating expenses 679 683 451
----------- ----------- -----------
Total non-interest expense 4,172 4,078 3,305
Income Before Income Taxes 1,781 922 972
----------- ----------- -----------
Provision for income taxes 550 273 11
----------- ----------- -----------
Net Income $ 1,230 $ 649 $ 961
=========== =========== ===========
Preferred dividends & Warrant
amortization 41 41 41
----------- ----------- -----------
Net Income Applicable to Common
Shareholders $ 1,189 $ 608 $ 920
=========== =========== ===========
Earnings Per Share
Basic earnings per share $ 0.31 $ 0.16 $ 0.33
Diluted earnings per share $ 0.29 $ 0.15 $ 0.32
Average shares outstanding 3,791,905 3,790,359 2,818,500
Average fully diluted shares 4,039,003 4,002,707 2,843,250
Total Shares outstanding at end of
period 3,815,089 3,814,539 2,848,500
Capital Ratios
Tier 1 leverage ratio 9.4% 9.6% 8.5%
Tier 1 risk-based capital ratio 12.1% 12.1% 12.0%
Total risk-based capital ratio 13.2% 13.3% 13.2%
Book value per share $ 12.85 $ 12.76 $ 11.89
Performance Ratios
Return on average assets 0.71% 0.39% 0.66%
Return on average common equity 9.56% 4.97% 10.85%
Net interest margin 3.13% 3.08% 3.04%
Cost of Funds 0.11% 0.12% 0.18%
Efficiency ratio 70.16% 72.37% 70.86%
Average Balances
Total Assets $ 689,361 $ 660,792 $ 575,479
Earning Assets 648,523 620,656 531,685
Total Loans 389,321 356,425 268,464
Total Securities 222,696 210,271 242,694
Total Deposits 617,678 591,691 521,104
Common Equity 49,473 48,692 33,652
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