1st Capital Bancorp Announces First Quarter 2022 Financial Results
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
1st Capital Bancorp is the holding company for 1st 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 | |
