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1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS
Los Angeles, CA (November 8, 2011) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported net income for the three and nine months ended September 30, 2011 of $354,000 and $593,000, respectively, compared to $155,000 and $398,000 for the same periods last year. Pre-tax, pre-provision earnings for the three and nine months ended September 30, 2011 was $354,000 and $868,000, respectively, compared to $255,000 and $598,000 for the same periods last year. Pre-tax, pre-provision earnings figures, which are non-GAAP financial measures, are presented because the Company believes adjusting its results to exclude tax and loan loss provisions provides stockholders with a useful metric for evaluating the core profitability of the Company. A schedule reconciling our GAAP net income to pre-tax, pre-provision earnings is provided in the summary financial information below. Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of the Company stated, “I’m encouraged by our results for the quarter, which continue to improve despite a challenging environment. Highlights of the quarter and year-to-date periods include:
Mr. Rothenberg continued, “I remain cautiously optimistic regarding the consistent improvement in our credit quality trends, as well as the level of our non-performing assets. These metrics have greatly improved since the third quarter of 2009, which we believe to be the peak of our credit related issues during this economic cycle. As of September 30, 2011, the ratio of non-performing assets to total assets and non-performing loans to total loans were 1.87% and 3.59%, respectively, compared to 4.87% and 6.66% at September 30, 2009. Furthermore, the Bank continues to maintain capital ratios that are double the regulatory requirements to be considered ‘well capitalized’.” Jason P. DiNapoli, President and Chief Operating Officer of the Company stated, “In addition, we’re beginning to see a modest recovery in loan demand. Despite only a $5.5 million increase in gross loans, loan originations increased to over $58.4 million during the nine months ended September 30, 2011, compared to $32.7 million for the same period last year. I attribute a significant portion of this progress to our continued investment in our business development teams, which through their dedication and unsurpassed commitment to serving our customers have become an integral part of our deposit and loan initiatives.” • The Bank’s total risk-based capital ratio was 20.15% at September 30, 2011, compared to the regulatory requirement of 10.00% for “well capitalized” financial institutions. The Bank’s capital does not include any capital received in connection with TARP, nor other forms of capital such as trust preferred securities, convertible preferred stock or other equity or debt instruments other than common stock.
• Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits, and money market deposits and savings, were $279.0 million and $197.9 million at September 30, 2011 and December 31, 2010, respectively, representing an increase of $81.1 million, or 41.0%. • Net interest margin was 3.05% and 3.27% for the three and nine months ended September 30, 2011, respectively, compared to 3.46% and 3.73% for the same periods last year.
• As of September 30, 2011, the allowance for loan losses (“ALL”) was $5.2 million or 2.84% of gross loans, compared to $5.3 million, or 2.95% of gross loans, at December 31, 2010. The ALL to total non-performing loans was 79.03% and 74.21% at September 30, 2011 and December 31, 2010, respectively. • Non-performing loans decreased $480,000, or 6.7%, to $6.6 million at September 30, 2011 from $7.1 million at December 31, 2010. Non-performing loans to total loans was 3.59% and 3.97% at September 30, 2011 and December 31, 2010, respectively. • Non-performing assets as a percentage of total assets declined to 1.87% at September 30, 2011, compared to 2.58% at December 31, 2010. • For the three and nine months ended September 30, 2011, the Company recorded net income of $354,000, or $0.04 per diluted share, and $593,000, or $0.07 per diluted share, respectively. During the same periods last year, the Company reported net income of $155,000, or $0.02 per diluted share, and $398,000, or $0.04 per diluted share. Capital Adequacy At September 30, 2011, the Company’s stockholders’ equity totaled $45.3 million compared to $44.3 million at December 31, 2010. At September 30, 2011, the Bank’s total risk-based capital ratio, tier 1 risk-based capital ratio, and tier 1 leverage ratio were 20.15%, 18.89%, and 11.10%, respectively, compared to the regulatory requirements for “well capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. In August 2010, the Company’s Board of Directors (the “Board”) authorized the purchase of up to $2.0 million of the Company’s common stock. Under this stock repurchase program, the Company has been acquiring its common stock in the open market from time to time beginning in August 2010. During the nine months ended September 30, 2011, the Company repurchased 267,345 shares in the open market at a cost ranging from $3.52 to $4.02 per share in connection with this program. At September 30, 2011, the remaining value of shares that may be repurchased under this program was $609,000. Balance Sheet Total assets increased 24.7%, or $76.0 million, to $384.4 million at September 30, 2011, from $308.4 million at December 31, 2010. The increase in total assets is primarily attributable to increases in cash and cash equivalents, investment securities and gross loans. Cash and cash equivalents increased $26.1 million, or 37.9%, from $69.0 million at December 31, 2010 to $95.1 million at September 30, 2011. Investment securities at September 30, 2011 were $103.3 million, representing an increase of $44.8 million, or 76.7%, from $58.5 million at December 31, 2010. The increase in investment securities was primarily attributable to the purchase of agency mortgage-backed securities, which had an average life of 4.08 years at September 30, 2011. Gross loans at September 30, 2011 were $184.8 million, representing an increase of $5.5 million, or 3.1%, from $179.3 million at December 31, 2010. Loan originations were $18.0 million and $58.4 million during the three and nine months ended September 30, 2011, compared to $14.8 million and $32.7 million during the same periods last year. Total liabilities at September 30, 2011 increased by $75.0 million, or 28.4%, to $339.0 million as compared to $264.0 million at December 31, 2010. This increase is primarily due to increases in non-interest bearing deposits and money market deposits and savings of $29.4 million and $60.6 million, respectively, due to continued core deposit gathering efforts, partially offset by declines of $13.2 million and $8.9 million in certificates of deposit and interest bearing demand accounts, respectively. Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and money market deposits and savings, were $279.0 million and $197.9 million at September 30, 2011 and December 31, 2010, respectively, representing an increase of $81.1 million, or 41.0%. The increase in total liabilities is also partially due to an $8.0 million increase in other borrowings, which were primarily utilized to fund additional loan production during the current year. Credit Quality Allowance and Provision for Loan Losses The ALL was $5.2 million, or 2.84% of our total loan portfolio, at September 30, 2011, as compared to $5.3 million, or 2.95% of our total loan portfolio, at December 31, 2010. The decline in our ratio of ALL to total loans is primarily a function of improving credit quality related trends within our loan portfolio. During the nine months ended September 30, 2011, our non-performing loans declined to $6.6 million from $7.1 million at December 31, 2010, and the ratio of our ALL to total non-performing loans improved to 79.03% at September 30, 2011 compared to 74.22% at December 31, 2010. In addition, our ratio of non-performing loans to total loans was 3.59% and 3.97% at September 30, 2011 and December 31, 2010, respectively. The ALL is impacted by inherent risk in the loan portfolio, including the level of our non-performing loans, as well as specific reserves and charge-off activities. There was no provision for loan losses for the three months ended September 30, 2011 and $275,000 for the nine months ended September 30, 2011, compared to $100,000 and $200,000 for the same periods last year. The decline in provision for loan losses recorded during the three months ended September 30, 2011, as compared to the same period last year, was primarily due to the general improvement in the level of our criticized and classified loans, which generally consist of special mention, substandard and doubtful loans. Special mention, substandard and doubtful loans were $6.8 million, $10.4 million and $900,000, respectively, at September 30, 2011, compared to $14.9 million, $16.7 million, and none at September 30, 2010. We had net recoveries of $162,000 during the three months ended September 30, 2011, and net charge-offs of $312,000 during the nine months ended September 30, 2011, compared to net charge-offs of $528,000 and $1.2 million during the same periods last year. Management believes that the ALL as of September 30, 2011 and December 31, 2010 was adequate to absorb known and inherent risks in the loan portfolio. Non-Performing Assets Non-performing assets totaled $7.2 million and $8.0 million at September 30, 2011 and December 31, 2010, respectively. Non-accrual loans totaled $6.6 million and $7.1 million at September 30, 2011 and December 31, 2010, respectively. At September 30, 2011, non-accrual loans consisted of four commercial loans totaling $2.3 million, two commercial real estate loans totaling $4.0 million and one consumer related loan totaling $345,000. As of September 30, 2011, other real estate owned (“OREO”) consisted of one single-family residential property totaling $532,000, which is located in California. As of December 31, 2010, OREO consisted of two single-family residential properties totaling $845,000, which were both located in California. As a percentage of total assets, the amount of non-performing assets was 1.87% and 2.58% at September 30, 2011 and December 31, 2010, respectively. Net Interest Income and Margin During the three and nine months ended September 30, 2011, net interest income was $2.8 million and $8.2 million, respectively, compared to $2.4 million and $7.3 million for the same periods last year. The increases in net interest income during the three and nine months ended September 30, 2011, is primarily related to an increase in loan and investment income earned as compared to the same periods last year, as well as a decline in interest expense incurred in connection with the Bank’s other borrowings. These items were partially offset by an increase in interest expense incurred on deposits, caused by growth within our deposit portfolio during the period. The Company’s net interest margin (net interest income divided by average interest earning assets) was 3.05% for the three months ended September 30, 2011, compared to 3.46% for the same period last year. During the three months ended September 30, 2011, the 41 basis point decline in net interest margin was primarily due to a decrease in the yield on earning assets of 46 basis points, partially offset by a decline of 10 basis points in the cost of interest bearing deposits and borrowings. The decrease in yield on earning assets is primarily attributable to a general decline in interest rates earned on these assets during the three months ended September 30, 2011, as compared to the same period last year, as well as an increase in the average balance of interest earning deposits at other financial institutions. These deposits yielded approximately 25 basis points during the three months ended September 30, 2011. During the three months ended September 30, 2011 as compared to the same period last year, the decline in our cost of interest bearing deposits and borrowings is primarily attributable to a general decrease in interest rates paid on these accounts. The average cost of interest bearing deposits and borrowings was 0.44% and 1.39%, respectively during the three months ended September 30, 2011 compared to 0.50% and 2.37% for the same period last year. The Company’s net interest margin was 3.27% for the nine months ended September 30, 2011, compared to 3.73% for the same period last year. During the nine months ended September 30, 2011, the 46 basis point decline in net interest margin was primarily due to a decrease in the yield on earning assets of 57 basis points, partially offset by a decline of 21 basis points in the cost of interest bearing deposits and borrowings. The decrease in yield on earning assets is primarily attributable to a general decline in interest rates earned on these assets during the nine months ended September 30, 2011, as compared to the same period last year, as well as an increase in the average balance of interest earning deposits at other financial institutions. These deposits yielded approximately 25 basis points during the nine months ended September 30, 2011. During the nine months ended September 30, 2011 as compared to the same period last year, the decline in our cost of interest bearing deposits and borrowings is primarily attributable to a general decrease in interest rates paid on these accounts, as well as a decline in the average balance of borrowings. The average cost of interest bearing deposits and borrowings was 0.45% and 1.42%, respectively during the nine months ended September 30, 2011 compared to 0.59% and 2.64% for the same period last year. The average balance of borrowings decreased to $5.6 million during the nine months ended September 30, 2011, as compared to $10.0 million for the same period last year. Non-Interest Income Non-interest income was $222,000 and $618,000 for the three and nine months ended September 30, 2011, compared to $223,000 and $662,000 for the same periods last year. There were no significant changes in the sources or amounts of non-interest income. Non-Interest Expense Non-interest expense was $2.7 million and $8.0 million for the three and nine months ended September 30, 2011, compared to $2.4 million and $7.4 million for the same periods last year. The variance in non-interest expense was primarily due to the additional costs incurred in connection with expanding the Bank’s business development team and the opening of our Santa Monica relationship office during the previous quarter. The increase in non-interest expense was partially offset by a reduction in the Bank’s FDIC assessments, which declined as a result of a change in the FDIC’s methodology regarding calculating a bank’s quarterly insurance assessments. The FDIC assessment was $41,000 and $266,000 for the three and nine months ended September 30, 2011, respectively, compared to $107,000 and $283,000 for the same periods last year. Income Tax Provision During the three and nine months ended September 30, 2011 and 2010, we did not record an income tax provision related to our pre-tax earnings. Tax expense that would normally arise because of the Company’s earnings was not recorded because it was offset by a reduction in the valuation allowance on the Company’s deferred tax asset. Net Income For the three and nine months ended September 30, 2011, the Company recorded net income of $354,000, or $0.04 per diluted share, and $593,000, or $0.07 per diluted share, respectively, compared to $155,000, or $0.02 per diluted share, and $398,000, or $0.04 per diluted share, for the same periods last year. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly-owned subsidiary, 1st Century Bank, N.A., is headquartered in the Century City area of Los Angeles, with a full service business bank in Century City, CA and a relationship office in Santa Monica, CA. The Bank’s primary focus is serving the specific banking needs of entrepreneurs, professionals and small businesses with the personal service of a traditional community bank, while offering the technologies of a big money center bank. The Company maintains a website at www.1cbank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. Summary Financial Information The following tables present relevant financial data from the Company’s recent performance (dollars in thousands, except per share data):
*Percentages are reported on an annualized basis.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS
Los Angeles, CA (August 10, 2011) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported net income for the three and six months ended June 30, 2011 of $116,000 and $240,000, respectively, compared to $119,000 and $243,000 for the same periods last year. Pre-tax, pre-provision earnings for the three and six months ended June 30, 2011 was $191,000 and $515,000, respectively, compared to $219,000 and $343,000 for the same periods last year. Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of the Company stated, “I’m pleased to announce our second quarter results, highlights of which include:
In addition, our bank continues to maintain double the regulatory capital required to be considered ‘well capitalized’ and we remain liquid as represented by a loan-to-deposit ratio of 62%. With our growth and our excellent capital and liquidity positions, coupled with our strong underwriting standards, I believe we’re well poised to benefit as the country’s economic conditions improve and with it quality loan demand returns.” Jason P. DiNapoli, President and Chief Operating Officer of the Company stated, “Our core deposits have grown by over 29% during the first six months of this year, and have helped to maintain our cost of deposits at 29 basis points. These core relationships represent an integral part of our Bank and I believe will be a valuable source of future business as the economy normalizes.” Pre-tax, pre-provision earnings figures, which are non-GAAP financial measures, are presented because the Company believes adjusting its results to exclude tax and loan loss provisions provides stockholders with a useful metric for evaluating the core profitability of the Company. A schedule reconciling our GAAP net income to pre-tax, pre-provision earnings is provided in the summary financial information below. 2011 2nd Quarter Highlights • The Bank’s total risk-based capital ratio was 20.30% at June 30, 2011, compared to the regulatory requirement of 10.00% for “well capitalized” financial institutions. The Bank’s capital does not include any funding received in connection with TARP, nor other forms of capital such as trust preferred securities, convertible preferred stock or other equity or debt instruments.
• Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits, and money market deposits and savings, were $255.4 million and $197.9 million at June 30, 2011 and December 31, 2010, respectively, representing an increase of $57.5 million, or 29.1%.
• As of June 30, 2011, the allowance for loan losses (“ALL”) was $5.1 million, or 2.72% of gross loans, compared to $5.3 million, or 2.95% of gross loans, at December 31, 2010. The ALL to total non-performing loans was 75.84% and 74.22% at June 30, 2011 and December 31, 2010, respectively. • Non-performing loans decreased $414,000, or 5.8%, to $6.7 million at June 30, 2011 from $7.1 million at December 31, 2010. Non-performing loans to total loans was 3.59% and 3.97% at June 30, 2011 and December 31, 2010, respectively. • Non-performing assets as a percentage of total assets declined to 2.09% at June 30, 2011, compared to 2.58% at December 31, 2010. • Net interest margin was 3.21% and 3.39% during the three and six months ended June 30, 2011, respectively, compared to 3.80% and 3.88% for the same periods last year. • For the three and six months ended June 30, 2011, the Company recorded net income of $116,000, or $0.01 per diluted share, and $240,000, or $0.03 per diluted share, respectively. During the same periods last year, the Company reported net income of $119,000, or $0.01 per diluted share, and $243,000, or $0.03 per diluted share. Capital Adequacy At June 30, 2011, the Company’s stockholders’ equity totaled $45.1 million compared to $44.3 million at December 31, 2010. At June 30, 2011, the Bank’s total risk-based capital ratio, tier 1 risk-based capital ratio, and tier 1 leverage ratio were 20.30%, 19.04%, and 11.83%, respectively, compared to the regulatory requirements for “well capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Balance Sheet Total assets increased 17.1%, or $52.7 million, to $361.1 million at June 30, 2011, from $308.4 million at December 31, 2010. The increase in total assets was primarily attributable to increases in cash and cash equivalents, investment securities and gross loans. Cash and cash equivalents increased $27.7 million, or 40.1%, from $69.0 million at December 31, 2010 to $96.7 million at June 30, 2011. This increase was primarily attributable to the growth in our deposit portfolio during the period. Investment securities at June 30, 2011 were $76.3 million, representing an increase of $17.8 million, or 30.5%, from $58.5 million at December 31, 2010. Gross loans at June 30, 2011 were $186.7 million, representing an increase of $7.4 million, or 4.1%, from $179.3 million at December 31, 2010. Loan originations were $10.5 million and $40.4 million during the three and six months ended June 30, 2011, compared to $8.0 million and $17.9 million during the same periods last year. Total liabilities at June 30, 2011 increased by $51.9 million, or 19.7%, to $315.9 million as compared to $264.0 million at December 31, 2010. This increase was primarily due to increases in non-interest bearing deposits and money market deposits and savings of $15.3 million and $46.7 million, respectively, due to continued core deposit gathering efforts, partially offset by declines of $12.1 million and $4.5 million in certificates of deposit and interest bearing demand accounts, respectively. Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and money market deposits and savings, were $255.4 million and $197.9 million at June 30, 2011 and December 31, 2010, respectively, representing an increase of $57.5 million, or 29.1%. The increase in total liabilities was also partially due to an $8.0 million increase in other borrowings, which were primarily utilized to fund additional loan production during the period. Credit Quality Allowance and Provision for Loan Losses The ALL was $5.1 million, or 2.72% of our total loan portfolio, at June 30, 2011 as compared to $5.3 million, or 2.95% of our total loan portfolio, at December 31, 2010. The decline in our ratio of ALL to total loans was primarily a function of improving trends within our loan portfolio. During the six months ended June 30, 2011, our non-performing loans declined to $6.7 million from $7.1 million at December 31, 2010, and the ratio of our ALL to total non-performing loans improved to 75.84% at June 30, 2011 compared to 74.22% at December 31, 2010. In addition, our ratio of non-performing loans to total loans was 3.59% and 3.97% at June 30, 2011 and December 31, 2010, respectively, and has declined for seven consecutive quarters, or 46.10% since the third quarter of 2009. The ALL is impacted by inherent risk in the loan portfolio, including the level of our non-performing loans, as well as specific reserves and charge-off activities. The provision for loan losses was $75,000 and $275,000 for the three and six months ended June 30, 2011, respectively, compared to $100,000 for both the three and six months ended June 30, 2010. We incurred net charge-offs of $467,000 and $474,000 during the three and six months ended June 30, 2011, compared to net charge-offs of $655,000 and $631,000 during the same periods last year. Management believes that the ALL as of June 30, 2011 and December 31, 2010 was adequate to absorb known and inherent risks in the loan portfolio. Non-Performing Assets Non-performing assets totaled $7.5 million and $8.0 million at June 30, 2011 and December 31, 2010, respectively. Non-accrual loans totaled $6.7 million and $7.1 million at June 30, 2011 and December 31, 2010, respectively. At June 30, 2011, non-accrual loans consisted of four commercial loans totaling $2.3 million, two commercial real estate loans totaling $4.1 million and one consumer related loan totaling $345,000. As of June 30, 2011, other real estate owned (“OREO”) consisted of two single-family residential properties totaling $845,000, which are both located in California. As a percentage of total assets, the amount of non-performing assets was 2.09% and 2.58% at June 30, 2011 and December 31, 2010, respectively. Net Interest Income and Margin During the three and six months ended June 30, 2011, net interest income was $2.7 million and $5.4 million compared to $2.4 million and $4.9 million for the same periods last year. The increases in net interest income during the three and six months ended June 30, 2011, was primarily related to an increase in loan and investment income earned as compared to the same periods last year, as well as a decline in interest expense incurred in connection with the Bank’s other borrowings. The Company’s net interest margin (net interest income divided by average interest earning assets) was 3.21% for the three months ended June 30, 2011, compared to 3.80% for the same period last year. During the three months ended June 30, 2011, the 59 basis point decline in net interest margin was primarily due to a decrease in the yield on earning assets of 70 basis points, partially offset by a decline of 20 basis points in the cost of interest bearing deposits and borrowings. The decrease in yield on earning assets was primarily attributable to a general decline in interest rates earned on these assets during the three months ended June 30, 2011, as compared to the same period last year, as well as an increase in the average balance of interest earning deposits at other financial institutions. These deposits yielded approximately 25 basis points during the current period. During the three months ended June 30, 2011 as compared to the same period last year, the decline in our cost of interest bearing deposits and borrowings was primarily attributable to a general decrease in interest rates paid on these accounts, as well as a decline in the average balance of borrowings. The average cost of interest bearing deposits was 0.46% during the three months ended June 30, 2011 compared to 0.52% for the same period last year. The average balance of borrowings decreased by $6.1 million during the three months ended June 30, 2011 as compared to the same period last year. The average cost of borrowings was 1.41% during the three months ended June 30, 2011 compared to 2.67% for the same period last year. The Company’s net interest margin was 3.39% for the six months ended June 30, 2011, compared to 3.88% for the same period last year. During the six months ended June 30, 2011, the 49 basis point decline in net interest margin was primarily due to a decrease in the yield on earning assets of 64 basis points, partially offset by a decline of 26 basis points in the cost of interest bearing deposits and borrowings. The decrease in yield on earning assets was primarily attributable to a general decline in interest rates earned on these assets during the six months ended June 30, 2011, as compared to the same period last year, as well as an increase in the average balance of interest earning deposits at other financial institutions. These deposits yielded approximately 25 basis points during the six months ended June 30, 2011. During the six months ended June 30, 2011 as compared to the same period last year, the decline in our cost of interest bearing deposits and borrowings was primarily attributable to a general decrease in interest rates paid on these accounts, as well as a decline in the average balance of borrowings. The average cost of interest bearing deposits was 0.45% during the six months ended June 30, 2011 compared to 0.57% for the same period last year. The average balance of borrowings decreased by $8.3 million during the six months ended June 30, 2011 as compared to the same period last year. The average cost of borrowings was 1.47% during the six months ended June 30, 2011 compared to 2.72% for the same period last year. Non-Interest Income Non-interest income was $192,000 and $396,000 for the three and six months ended June 30, 2011, compared to $210,000 and $439,000 for the same periods last year. Non-Interest Expense Non-interest expense was $2.7 million and $5.3 million for the three and six months ended June 30, 2011, compared to $2.4 million and $5.0 million for the same periods last year. The variance in non-interest expense was primarily due to the additional costs incurred in connection with expanding the Bank’s business development team and the opening of our Santa Monica relationship office during the current quarter. Income Tax Provision During the three and six months ended June 30, 2011 and 2010, we did not record an income tax provision related to our pre-tax earnings. Tax expense that would normally arise, because of the Company’s earnings, was not recorded because it was offset by a reduction in the valuation allowance on the Company’s deferred tax asset. Net Income For the three and six months ended June 30, 2011, the Company recorded net income of $116,000, or $0.01 per diluted share, and $240,000, or $0.03 per diluted share, respectively, compared to $119,000, or $0.01 per diluted share, and $243,000, or $0.03 per diluted share, for the same periods last year. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly-owned subsidiary, 1st Century Bank, N.A., is headquartered in the Century City area of Los Angeles, with a full service business bank in Century City, CA and a relationship office in Santa Monica, CA. The Bank’s primary focus is serving the specific banking needs of entrepreneurs, professionals and small businesses with the personal service of a traditional community bank, while offering the technologies of a big money center bank. The Company maintains a website at www.1cbank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. Summary Financial Information The following tables present relevant financial data from the Company’s recent performance (dollars in thousands, except per share data):
*Percentages are reported on an annualized basis.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS
Los Angeles, CA (May 11, 2011) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the quarter ended March 31, 2011. “I’m encouraged by our start to the new year, reporting net income of $123,000 for the first quarter and quarterly growth rates of 10% in our core deposits and over 5% in loans. These results highlight our team’s commitment to becoming the premier community business bank on the west side of Los Angeles, as well as our belief that, as the economy normalizes, the development of our core deposit franchise will ultimately translate into increased loan demand. In addition, we further lowered our average cost of funds to 29 basis points during the quarter and increased our total assets to over $319 million. Our pre-tax pre-provision earnings, which excludes the impact of tax and loan loss provisions, were $323,000 and $124,000, during the three months ended March 31, 2011 and 2010, respectively,” stated Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of the Company. Jason P. DiNapoli, President and Chief Operating Officer of the Company stated, “From a credit perspective, we continue to experience stability in our portfolio and positive trends related to our problem assets. In addition, the ratio of our allowance for loan losses to total loans remained strong at 2.9% and our capital ratios were well in excess of the regulatory requirements to be considered ‘well capitalized’. At March 31, 2011, the Bank’s total risk-based capital ratio was 19.4% compared to the regulatory requirement of 10.0%, with all of our capital being common equity.” Mr. DiNapoli continued, “We remain focused on growing core deposits and looking for quality loans in our West LA market. As part of this effort, we recently signed a lease in the heart of downtown Santa Monica for our first deposit production office. This office will further strengthen our roots and franchise on the Westside and is scheduled to open during the second quarter of this year.” Pre-tax, pre-provision earnings figures, which are non-GAAP financial measures, are presented because the Company believes adjusting its results to exclude tax and loan loss provisions provides stockholders with a useful metric for evaluating the core profitability of the Company. A schedule reconciling our GAAP net income to pre-tax, pre-provision earnings is provided in the summary financial information below. 2011 1st Quarter Highlights • The Bank’s total risk-based capital ratio was 19.42% at March 31, 2011, compared to the regulatory requirement of 10.00% for “well capitalized” financial institutions. The Bank’s capital does not include any funding received in connection with TARP, nor other forms of capital such as trust preferred securities, convertible preferred stock or other equity or debt instruments.
• Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits, and money market deposits and savings, were $216.7 million and $197.9 million at March 31, 2011 and December 31, 2010, respectively, representing an increase of $18.8 million, or 9.5%.
• As of March 31, 2011, the allowance for loan losses was $5.5 million, or 2.90% of gross loans, compared to $5.3 million, or 2.95% of gross loans, at December 31, 2010. The ALL to total non-performing loans was 78.36% and 74.22% at March 31, 2011 and December 31, 2010, respectively. • Non-performing loans decreased $130,000, or 1.8%, to $7.0 million at March 31, 2011 from $7.1 million at December 31, 2010. Non-performing loans to total loans was 3.71% and 3.97% at March 31, 2011 and December 31, 2010, respectively. • Non-performing assets as a percentage of total assets declined to 2.46% at March 31, 2011, compared to 2.58% at December 31, 2010. • Net interest margin was 3.59% and 3.96% during the three months ended March 31, 2011 and 2010, respectively. • For the three months ended March 31, 2011 and 2010, the Company recorded net income of $123,000, or $0.01 per diluted share, and $124,000, or $0.01 per diluted share, respectively. Capital Adequacy At March 31, 2011, the Company’s stockholders’ equity totaled $44.5 million compared to $44.3 million at December 31, 2010. At March 31, 2011, the Bank’s total risk-based capital ratio, tier 1 risk-based capital ratio, and tier 1 leverage ratio were 19.42%, 18.15%, and 12.94%, respectively, compared to the regulatory requirements for “well capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. On August 16, 2010, we announced that our board of directors had authorized a share repurchase program, permitting us to acquire up to $2.0 million of our common stock, or approximately 6.5% of our outstanding common stock as of June 30, 2010. The manner, price, number and timing of these share repurchases are subject to market conditions and applicable U.S. Securities and Exchange Commission rules. As of March 31, 2011, the Company had repurchased 109,654 shares in the open market in connection with this program, at an average cost per share of $3.80. Balance Sheet Total assets increased 3.4%, or $10.6 million, to $319.0 million at March 31, 2011, from $308.4 million at December 31, 2010. The increase in total assets was primarily attributable to increases in gross loans and investment securities, partially offset by a decrease in cash and cash equivalents. Gross loans at March 31, 2011 were $188.5 million, representing an increase of $9.2 million, or 5.1%, from $179.3 million at December 31, 2010. Loan originations were $29.9 million during the three months ended March 31, 2011, compared to $9.9 million during the same period last year. Investment securities at March 31, 2011 were $64.6 million, representing an increase of $6.1 million, or 10.4%, from $58.5 million at December 31, 2010. Cash and cash equivalents decreased $4.4 million, or 6.4%, from $69.0 million at December 31, 2010 to $64.6 million at March 31, 2011. The decrease in cash and cash equivalents was primarily attributable to utilizing excess liquidity to fund loan originations and to purchase investment securities. Total liabilities at March 31, 2011 increased by $10.6 million, or 4.0%, to $274.6 million as compared to $264.0 million at December 31, 2010. This increase was primarily due to increases in non-interest bearing deposits and money market deposits and savings of $5.4 million and $13.1 million, respectively, due to continued core deposit gathering efforts, partially offset by a $6.2 million decrease in certificates of deposit. Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and money market deposits and savings, were $216.7 million and $197.9 million at March 31, 2011 and December 31, 2010, respectively, representing an increase of $18.8 million, or 9.5%. Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses (“ALL”) was $5.5 million, or 2.90% of our total loan portfolio, at March 31, 2011 as compared to $5.3 million, or 2.95% of our total loan portfolio, at December 31, 2010. The ALL to total non-performing loans was 78.36% and 74.22% at March 31, 2011 and December 31, 2010, respectively. The ALL is impacted by inherent risk in the loan portfolio, including the level of our non-performing loans, as well as specific reserves and charge-off activities. The provision for loan losses was $200,000 for the three months ended March 31, 2011, compared to no provision for the three months ended March 31, 2010. We incurred net charge-offs of $7,000 during the three months ended March 31, 2011, compared to net recoveries of $24,000 during the same period last year. Management believes that the ALL as of March 31, 2011 and December 31, 2010 was adequate to absorb known and inherent risks in the loan portfolio. Non-Performing Assets Non-performing assets totaled $7.8 million and $8.0 million at March 31, 2011 and December 31, 2010, respectively. Non-accrual loans totaled $7.0 million and $7.1 million at March 31, 2011 and December 31, 2010, respectively. At March 31, 2011, non-accrual loans consisted of three commercial loans totaling $1.6 million, three commercial real estate loans totaling $5.0 million and one consumer related loan totaling $345,000. As of March 31, 2011, other real estate owned (“OREO”) consisted of two single-family residential properties totaling $845,000, which are both located in California. As a percentage of our total loan portfolio, the amount of non-performing loans was 3.71% and 3.97% at March 31, 2011 and December 31, 2010, respectively. As a percentage of total assets, the amount of non-performing assets was 2.46% and 2.58% at March 31, 2011 and December 31, 2010, respectively. “Like most community business banks, credit quality will remain a critical factor for us. Despite the recent improving trends, we continue to focus on the timely recognition and resolution of any credit related matters. Each successive quarter during the past year, we’ve generally experienced improvements within our loan portfolio and I’m cautiously optimistic that these positive trends will continue. I also believe that, because of our aggressive approach to addressing and containing these issues, we will benefit as markets improve and loan demand returns,” stated Mr. DiNapoli. Net Interest Income and Margin During the three months ended March 31, 2011, net interest income was $2.7 million compared to $2.5 million for the same period last year. The increase was primarily related to an increase of $62,000 in interest earned in connection with our loan portfolio, an increase of $65,000 in interest earned on our investment securities and a $77,000 decline in interest expense incurred on borrowings. The fluctuation in our loan interest income was primarily related to an increase of $7.4 million in the average balance of loans, partially offset by a 6 basis point decline in our loan yield. The increase in interest earned on our investment portfolio was primarily due to an increase in the average balance of residential mortgage-backed securities and CMOs, partially offset by a 93 basis points decline in the yield earned on these securities. The Company’s net interest margin (net interest income divided by average interest earning assets) was 3.59% for the three months ended March 31, 2011, compared to 3.96% for the same period last year. The 37 basis point decline in net interest margin was primarily due to a decrease in the yield on earning assets of 57 basis points, partially offset by a decline of 33 basis points in the cost of interest bearing deposits and borrowings. The decrease in yield on earning assets was primarily the result of an increase of $27.0 million in the average balance of lower yielding interest earning deposits at other financial institutions. These deposits yielded approximately 25 basis points during the three months ended March 31, 2011. During the three months ended March 31, 2011 as compared to the same period last year, the decline in our cost of interest bearing deposits and borrowings was primarily attributable to the decrease in interest rates paid on these accounts, as well as a decline in the average balance of borrowings, partially offset by an increase in the average balance of interest bearing deposits. The average cost of interest bearing deposits was 0.45% during the three months ended March 31, 2011 compared to 0.61% for the same period last year. The average balance of borrowings decreased by $10.5 million during the three months ended March 31, 2011 as compared to the same period last year. The average cost of borrowings was 1.59% during the three months ended March 31, 2011 compared to 2.76% for the same period last year. Non-Interest Income Non-interest income was $204,000 for the three months ended March 31, 2011 compared to $229,000 for the three months ended March 31, 2010. The decrease in non-interest income was primarily due to a decrease in loan arrangement fees of $38,000, partially offset by an increase in service charges and other operating income of $13,000. Non-interest income primarily consists of loan arrangement fees, service charges and fees on deposit accounts, as well as other operating income, which mainly consists of wire transfer and other consumer related fees. Loan arrangement fees are related to a college loan funding program the Company established with a student loan provider. The Company initially funds student loans originated by the student loan provider in exchange for non-interest income. All loans are purchased by the student loan provider within 30 days of origination. All purchase commitments are supported by collateralized deposit accounts. Service charges and other operating income includes service charges and fees on deposit accounts, as well as other operating income, which mainly consists of outgoing funds transfer wire fees. Non-Interest Expense Non-interest expense was $2.6 million for both the three months ended March 31, 2011 and 2010. Compensation and benefits was $1.4 million for both the three months ended March 31, 2011 and 2010. Occupancy expense was $239,000 for the three months ended March 31, 2011, compared to $224,000 for the three months ended March 31, 2010, an increase of $15,000, or 6.7%. Income Tax Provision During the three months ended March 31, 2011 and 2010, we did not record an income tax provision related to our pre-tax earnings. Tax expense that would normally arise, because of the Company’s earnings during the three months ended March 31, 2011 and 2010, was not recorded because it was offset by a reduction in the valuation allowance on the Company’s deferred tax asset. Net Income For the three months ended March 31, 2011 and 2010, the Company recorded net income of $123,000, or $0.01 per diluted share, and $124,000, or $0.01 per diluted share, respectively. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly-owned subsidiary, 1st Century Bank, N.A., is a full service business bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is serving the specific banking needs of entrepreneurs, professionals and small businesses with the personal service of a traditional community bank, while offering the technologies of a big money center bank. The Company maintains a website at www.1cbank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. Summary Financial Information The following tables present relevant financial data from the Company’s recent performance (dollars in thousands, except per share data):
*Percentages are reported on an annualized basis.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS
Los Angeles, CA (March 15, 2011) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the quarter and year ended December 31, 2010. “I’m proud to announce our financial results for the fourth quarter and the year, which reflect our continuing commitment to growing the Company’s deposit franchise and expanding our footprint within the Westside of Los Angeles. During the year, core deposits increased by over 47%, helping us to reduce our average cost of funds to 42 basis points for the year ended December 31, 2010. The growth in our core deposits has also enabled us to finish the year with total assets of over $308 million and represents the first time in our history that we’ve reported total assets in excess of $300 million. Despite these accomplishments, I am disappointed to report net losses of $2.4 million and $2.0 million during the quarter and year ended December 31, 2010, respectively. These losses were primarily caused by a single problem credit that emerged during the fourth quarter and resulted in a $2.0 million charge to our provision for loan losses. The Bank has commenced legal proceedings in connection with this credit and I believe that the resolution of this matter will result in a substantial recovery for the Bank. Our pre-tax pre-provision earnings, which excludes the impact of this item, were $214,000 and $813,000, respectively, during these same periods,” stated Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of the Company. Mr. Rothenberg continued, “Regardless, I remain optimistic and encouraged by our achievements in 2010. I firmly believe that the loss incurred in connection with this lone credit was an isolated incident and does not accurately reflect the general improvements that we’re experiencing within our loan portfolio. With the exception of this credit, our outlook related to problem credits has steadily improved and we continue to observe an overall stabilizing trend within our loan portfolio. Non-performing assets declined by 19% during the year and the percentage of non-performing loans to total loans has consistently improved over the past four consecutive quarters. In addition, the ratio of our allowance for loan losses to total loans was 2.95% at year end and our capital ratios remain more than double the regulatory requirements to be considered ‘well capitalized’. At December 31, 2010, the Bank’s total risk-based capital ratio was 20.2% compared to the regulatory requirement of 10.0%, with all of our capital being common equity; with no preferred stock, no trust preferred stock, no troubled asset relief program (“TARP”) funds, and no other synthetic equity instruments.” Jason P. DiNapoli, President and Chief Operating Officer of the Company stated, “I believe that 2010 represented a defining year for the Company. In addition to reaching the $300 million total asset milestone, the Company has developed over 2,900 deposit account relationships and expanded non-interest bearing demand deposits to over 35% of our total deposit portfolio at year end. Looking forward to 2011, I’m excited to build on the successes of 2010 and feel that we’re well positioned going into the new year.” Pre-tax, pre-provision earnings figures, which are non-GAAP financial measures, are presented because the Company believes adjusting its results to exclude tax and loan loss provisions provides stockholders with a useful metric for evaluating the core profitability of the Company. A schedule reconciling our GAAP net loss to pre-tax, pre-provision earnings is provided in the table below.
2010 Fourth Quarter and Year End Highlights • The Bank’s total risk-based capital ratio was 20.16% at December 31, 2010, which is above the regulatory requirement of 10.00% for “well capitalized” financial institutions. The Bank’s capital does not include any funding received in connection with TARP, nor other forms of capital such as trust preferred securities, convertible preferred stock or other equity or debt instruments. • Total assets increased 13.3%, or $36.3 million, to $308.4 million at December 31, 2010, from $272.1 million at December 31, 2009. • Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits, savings and money market deposits, were $197.9 million and $133.9 million at December 31, 2010 and December 31, 2009, respectively, representing an increase of $64.0 million, or 47.8%. • Cost of funds was 0.32% and 0.42% for the three months and year ended December 31, 2010, respectively, compared to 0.66% and 0.66% for the same periods last year. • As of December 31, 2010, the allowance for loan losses was $5.3 million, or 2.95% of gross loans, compared to $5.5 million, or 3.01% of gross loans, at December 31, 2009. • Non-performing loans decreased $2.7 million, or 27.6%, to $7.1 million at December 31, 2010 from $9.8 million at December 31, 2009. The decline in non-performing loans was primarily attributable to loan pay-downs received and charge-offs incurred during the current period and, to a lesser extent, loans migrating back to performing status or being foreclosed upon and transferred to other real estate owned. • Non-performing assets as a percentage of total assets has declined to 2.58% at December 31, 2010, compared to 3.60% at December 31, 2009. • Net interest margin for the fourth quarter of 2010 decreased 47 basis points to 3.33% compared to 3.80% for the fourth quarter of 2009. Net interest margin decreased to 3.62% from 4.13% comparing year ended December 31, 2010 to year ended December 31, 2009. • There was no income tax provision for the year ended December 31, 2010 compared to a $3.5 million income tax provision for the year ended December 31, 2009. The income tax provision in 2009 was related to recording of a valuation allowance against the Company’s deferred tax assets. • Net loss was $2.4 million, or $0.27 per diluted share, and $2.0 million, or $0.22 per diluted share, for the quarter and year ended December 31, 2010, respectively, compared to net loss of $3.5 million, or $0.39 per diluted share, and $7.8 million, or $0.86 per diluted share, for the quarter and year ended December 31, 2009, respectively. Capital Adequacy At December 31, 2010, the Company’s stockholders’ equity totaled $44.3 million compared to $46.3 million at December 31, 2009. The decline in stockholders’ equity was primarily caused by the $2.0 million net loss incurred during 2010, as well as an increase of $550,000 of treasury stock acquired during 2010. At December 31, 2010, the Bank’s total risk-based capital ratio, tier 1 risk-based capital ratio, and tier 1 leverage ratio were 20.16%, 18.90%, and 12.88%, respectively, and were more than double the regulatory requirements for “well capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. On August 16, 2010, we announced that our board of directors had authorized a share repurchase program, permitting us to acquire up to $2.0 million of our common stock, or approximately 6.5% of our outstanding common stock as of June 30, 2010. The manner, price, number and timing of these share repurchases are subject to market conditions and applicable U.S. Securities and Exchange Commission rules. As of December 31, 2010, the Company had repurchased 107,142 shares in the open market at a cost ranging from $3.35 to $4.02 per share in connection with this program. Balance Sheet Total assets increased 13.3%, or $36.3 million, to $308.4 million at December 31, 2010, from $272.1 million at December 31, 2009. The growth in total assets was primarily due to increases of $23.1 million and $15.4 million in cash and cash equivalents and investment securities, respectively, partially offset by a decrease of $2.4 million in gross loans. Cash and cash equivalents totaled $69.0 million and $45.9 million at December 31, 2010 and 2009, respectively. The elevated amount of cash and cash equivalents maintained at the most recently completed year end was primarily due to the increase in deposits generated during the year. The increase in investment securities was primarily related to purchases during the most recently completed year of 10 and 15-year agency mortgage backed securities. Gross loans at December 31, 2010 were $179.3 million, which represented a decrease of $2.4 million, or 1.3%, from $181.7 million at December 31, 2009. Total liabilities increased by $38.2 million to $264.0 million as compared to $225.8 million at December 31, 2009. This increase was primarily due to increases in non-interest bearing deposits, interest bearing checking and money market deposits and savings of $23.7 million, $13.8 million and $26.5 million, respectively, due to our continued core deposit gathering efforts, partially offset by a $13.3 million decrease in certificates of deposit and a $14.5 million decrease in other borrowings. At December 31, 2010, total deposits were $258.0 million compared to $207.4 million at December 31, 2009, representing an increase of 24.4%, or $50.6 million. Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and money market deposits and savings, were $197.9 million and $133.9 million at December 31, 2010 and December 31, 2009, respectively, representing an increase of $64.0 million, or 47.8%. As of December 31, 2010 and 2009, core deposits as a percentage of our total deposit portfolio were 76.7% and 64.6%, respectively. Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses (“ALL”) was $5.3 million, or 2.95% of our total loan portfolio, at December 31, 2010 as compared to $5.5 million, or 3.01% of our total loan portfolio, at December 31, 2009. The ALL is impacted by inherent risk in the loan portfolio, including the level of our non-performing loans, as well as specific reserves and charge-off activities. The provision for loan losses was $2.8 million and $6.2 million for the years ended December 31, 2010 and 2009, respectively. The decrease in the provision for loan losses were primarily due to a general improvement in the level of non-performing loans, as well as a decrease in the amount of charge-offs incurred during 2010 as compared to the same period last year. We incurred net charge-offs of $3.0 million during the most recently completed year compared to $5.8 million during the same period last year. During the fourth quarter of 2010, we recorded a $2.0 million provision for loan losses and a corresponding $1.0 million charge-off related to a commercial loan to a borrower located in Southern California. At December 31, 2010, the remaining balance of this loan was on non-accrual status. Management believes that the ALL as of December 31, 2010 and December 31, 2009 was adequate to absorb known and inherent risks in the loan portfolio. Non-Performing Assets Non-performing assets totaled $8.0 million and $9.8 million at December 31, 2010 and December 31, 2009, respectively. Non-accrual loans totaled $7.1 million and $9.8 million at December 31, 2010 and 2009, respectively. At December 31, 2010, non-accrual loans consisted of four commercial loans totaling $1.7 million, three commercial real estate loans totaling $5.1 million and one consumer related loan totaling $345,000. As of December 31, 2010, other real estate owned (“OREO”) consisted of two single-family residential properties totaling $845,000. These properties are located in Southern California. As of December 31, 2009, the Company did not have any OREO. As a percentage of our total loan portfolio, the amount of non-performing loans was 3.97% and 5.40% at December 31, 2010 and December 31, 2009, respectively. As a percentage of total assets, the amount of non-performing assets was 2.58% and 3.60% at December 31, 2010 and 2009, respectively. “Although I’m disappointed by the isolated credit loss incurred during the last quarter of this year, I don’t believe it should overshadow the overall progress and improving trends that we’re seeing within our loan portfolio. Our credit team has worked diligently to limit our credit related losses, as well as identify and resolve credit issues in a timely manner. I’m extremely proud of our team and their accomplishments during 2010,” stated Mr. DiNapoli. Net Interest Income and Margin For the quarter and year ended December 31, 2010, average interest earning assets were $305.3 million and $273.4 million, respectively, generating net interest income of $2.6 million and $9.9 million, respectively. For the quarter and year ended December 31, 2009, average interest-earning assets were $258.2 million and $252.4 million, respectively, generating net interest income of $2.5 million and $10.4 million, respectively. The growth in average earning assets during the quarter and year ended December 31, 2010 was primarily related to interest earning deposits at other financial institutions, which was primarily funded by an increase in average deposits during the year, partially offset by a decline in average other borrowings. The Company’s net interest margin was 3.33% and 3.62% for the quarter and year ended December 31, 2010, respectively, compared to 3.80% and 4.13% for the same periods last year. The 47 and 51 basis point declines in net interest margin during the quarter and year ended December 31, 2010, respectively, was primarily due to decreases in yield on earning assets of 74 and 70 basis points, respectively, partially offset by declines of 43 and 26 basis points, respectively, in the cost of interest bearing deposits and borrowings. The decreases in yield on earning assets was primarily the result of increases in the average balance of lower yielding interest earning deposits at other financial institutions, which increased by $56.0 million and $47.3 million, respectively, during the quarter and year ended December 31, 2010 as compared to the same periods last year. The increase in the average balance of interest earning deposits at other financial institutions was primarily due to excess liquidity generated by the growth in deposits. Non-Interest Income Non-interest income was $284,000 and $945,000 for the quarter and year ended December 31, 2010, respectively, compared to $250,000 and $1.0 million for the same periods last year. Non-interest income primarily consists of loan arrangement fees, service charges and fees on deposit accounts, as well as other operating income, which mainly consists of wire transfer and other consumer related fees. Loan arrangement fees are related to a college loan funding program the Company established with a student loan provider. The Company initially funds student loans originated by the student loan provider in exchange for non-interest income. All loans are purchased by the student loan provider within 30 days of origination. All purchase commitments are supported by collateralized deposit accounts. Service charges and other operating income includes service charges and fees on deposit accounts, as well as other operating income, which mainly consists of outgoing funds transfer wire fees. Non-Interest Expense Non-interest expense was $2.6 million for the quarter ended December 31, 2010 compared to $2.4 million for the same period last year, representing an increase of $210,000, or 8.7%. The increase during the quarter was primarily attributed to an increase in professional fees incurred related to loan related matters during the current quarter. Non-interest expense was $10.0 million for the year ended December 31, 2010 compared to $9.6 million for the same period last year, representing an increase of $419,000, or 4.4%. The increase during the year was primarily due to incremental hiring of additional staff to handle the growth in deposits, as well as an increase in technology related costs. Income Tax Provision There was no income tax provision recorded for the quarter and year ended December 31, 2010 compared to none and $3.5 million, respectively for the same periods last year. Any income tax benefit that would normally arise because of the Company’s losses incurred during the year ended December 31, 2010 is not recorded because it is offset by a corresponding increase in the valuation allowance on the Company’s net deferred tax assets. During the year ended December 31, 2009, we established a full valuation allowance against the Company’s deferred tax assets due to uncertainty regarding its realizability. During the year ended December 31, 2010, we reassessed the need for this valuation allowance and concluded that a full valuation allowance remained appropriate. Management reached this conclusion as a result of the Company’s cumulative losses since inception, and the anticipated near term economic climate in which the Company will operate. Loss before Income Taxes The Company’s loss before income taxes for the quarter and the year ended December 31, 2010 was $2.4 million and $2.0 million, respectively. The Company’s loss before income taxes for the quarter and the year ended December 31, 2009 was $3.5 million and $4.3 million, respectively. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly-owned subsidiary, 1st Century Bank, N.A., is a full service business bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is serving the specific banking needs of entrepreneurs, professionals and small businesses with the personal service of a traditional community bank, while offering the technologies of a big money center bank. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a further decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation, (5) the outcome of litigation regarding a problem credit that emerged during the fourth quarter and resulted in a $2.0 million charge to our provision for loan losses, and (6) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. The following tables present relevant financial data from the Company’s recent performance (dollars in thousands, except per share data):
*Percentages are reported on an annualized basis.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS Los Angeles, CA (November 9, 2010) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the three and nine months ended September 30, 2010. “While the general economy still faces significant challenges, I remain optimistic regarding the Company’s progress and ability to successfully emerge from this difficult economic period as a stronger and better positioned franchise. We recorded our third consecutive profitable quarter. We also closed the period with another record in total assets of $299 million, resulting primarily from the continued growth in our core deposits, which have increased by over $50.9 million, or 38.0%, since the beginning of this year. As a result, our year-to-date cost of funds has declined to 46 basis points,” stated Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of the Company. Mr. Rothenberg continued, “We believe that these positive developments are a result of our conservative and cautious approach to managing our balance sheet, a practice we will continue. We’ve maintained elevated levels of liquidity throughout the current year and continued our proactive approach in connection with addressing problem credits. Non-performing assets have declined by 24% during the year and our allowance for loans losses to total loans is approximately 2.7% at the end of the third quarter. In addition, our capital ratios remain more than double the regulatory requirements to be considered ‘well capitalized’. At September 30, 2010, the Bank’s total risk-based capital ratio was 22.2% compared to the regulatory requirement of 10.0%, with all of our capital being common equity; with no preferred stock, no trust preferred stock, no troubled asset relief program (“TARP”) funds, and no other synthetic equity instruments.” Jason P. DiNapoli, President and Chief Operating Officer of the Company stated, “The strength and strategic focus of our franchise has always been predicated on the trust and personal relationships that we’ve developed with our customers by offering them extraordinary service and creative banking solutions. This strategy has enabled us to grow our core deposits at an annualized rate of over 50% during the current year and allowed us to further expand the Bank’s footprint within West Los Angeles.” 2010 Third Quarter and Year-To-Date Highlights • The Bank’s total risk-based capital ratio was 22.21% at September 30, 2010, which is above the regulatory requirement of 10.00% for “well capitalized” financial institutions. The Bank’s capital does not include any funding received in connection with TARP, which we declined to apply for and participate in, nor other forms of capital such as trust preferred securities, convertible preferred stock or other equity or debt instruments. • Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits, savings and money market deposits, were $184.8 million and $133.9 million at September 30, 2010 and December 31, 2009, respectively, representing an increase of $50.9 million, or 38.0%. At September 30, 2009, total core deposits were $115.3 million, representing an increase of $69.5 million, or 60.3%, during the past 12 months. • As of September 30, 2010, the allowance for loan losses was $4.5 million, or 2.67% of gross loans, compared to $5.5 million, or 3.01% of gross loans, at December 31, 2009. • Non-performing loans totaled $7.2 million and $9.8 million at September 30, 2010 and December 31, 2009, respectively. The decline in non-performing loans was primarily attributable to loan pay-downs received and charge-offs incurred during the current period. • Net interest margin was 3.46% and 3.73% for the three and nine months ended September 30, 2010, respectively, compared to 4.08% and 4.24% for the same periods last year. • Cost of funds was 0.38% and 0.46% for the three and nine months ended September 30, 2010, respectively, compared to 0.69% and 0.66% for the same periods last year. • For the three and nine months ended September 30, 2010, the Company recorded net income of $155,000, or $0.02 per diluted share, and $398,000, or $0.04 per diluted share, respectively, compared to net losses of $4.6 million, or $0.50 per diluted share, and $4.3 million, or $0.47 per diluted share, respectively, for the same periods last year. Capital Adequacy At September 30, 2010, the Company’s stockholders’ equity totaled $47.2 million compared to $46.3 million at December 31, 2009. The increase was primarily related to an increase in unrealized gain on our available for sale investment portfolio and net income earned during the nine months ended September 30, 2010. At September 30, 2010, the Bank’s total risk-based capital ratio, tier 1 risk-based capital ratio, and tier 1 leverage ratio were 22.21%, 20.95%, and 14.88%, respectively, and were more than double the regulatory requirements for “well capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. On August 16, 2010, we announced that our board of directors had authorized a share repurchase program, permitting us to acquire up to $2.0 million of our common stock, or approximately 6.5% of our outstanding common stock as of June 30, 2010. The shares are to be acquired at prevailing prices through open market transactions. The manner, price, number and timing of these share repurchases are subject to market conditions and applicable U.S. Securities and Exchange Commission (“SEC”) rules. During the three months ended September 30, 2010, we repurchased a total of 35,480 shares at a weighted average price of $3.54 per share under this program, for an aggregate amount of approximately $125,000. Balance Sheet Total assets increased 9.8%, or $26.8 million, to $298.9 million at September 30, 2010, from $272.1 million at December 31, 2009. The increase in total assets was primarily attributable to an increase in cash and cash equivalents partially offset by a decrease in gross loans. Cash and cash equivalents increased $43.7 million from $45.9 million at December 31, 2009 to $89.6 million at September 30, 2010. The increase in cash and cash equivalents was primarily attributable to the increase in deposits generated during the nine months ended September 30, 2010, as well as the cash flows received in connection with loan amortization and pay-downs. Gross loans at September 30, 2010 were $169.1 million, which represented a decrease of $12.6 million, or 6.9%, from $181.7 million at December 31, 2009. The decrease in gross loans was primarily attributable to loan amortization and pay-downs and, to a lesser extent, loan charge-offs. Total liabilities increased by $25.9 million to $251.7 million as compared to $225.8 million at December 31, 2009. This increase was primarily due to increases in non-interest bearing deposits, interest bearing checking and savings and money market deposits of $20.6 million, $12.8 million and $17.5 million, respectively, due to continued core deposit gathering efforts, partially offset by a $12.6 million decrease in certificates of deposit and a $12.5 million decrease in other borrowings. At September 30, 2010, total deposits were $245.6 million compared to $207.4 million at December 31, 2009, representing an increase of 18.4%, or $38.2 million. Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and savings and money market deposits, were $184.8 million and $133.9 million at September 30, 2010 and December 31, 2009, respectively, representing an increase of $50.9 million, or 38.0%. Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses (“ALL”) was $4.5 million, or 2.67% of our total loan portfolio, at September 30, 2010 as compared to $5.5 million, or 3.01% of our total loan portfolio, at December 31, 2009. The provision for loan losses was $100,000 and $200,000 for the three and nine months ended September 30, 2010, respectively, compared to $1.7 million and $2.4 million, respectively, for the same periods last year. During the three and nine months ended September 30, 2010, we had net charge-offs of $528,000 and $1.2 million, respectively, compared to $874,000 and $2.0 million during the same periods last year. Management believes that the ALL as of September 30, 2010 and December 31, 2009 was adequate to absorb known and inherent risks in the loan portfolio. Non-Performing Assets Non-performing assets totaled $7.5 million and $9.8 million at September 30, 2010 and December 31, 2009, respectively. At September 30, 2010, non-accrual loans consisted of six commercial loans totaling $940,000, three commercial real estate mortgage loans totaling $5.4 million, and two residential real estate mortgage loans totaling $876,000. At September 30, 2010, other real estate owned (“OREO”) consisted of a single family residential property totaling $313,000. As a percentage of our total loan portfolio, the amount of non-performing loans was 4.25% and 5.40% at September 30, 2010 and December 31, 2009, respectively. As a percentage of total assets, the amount of non-performing assets was 2.51% and 3.60% at September 30, 2010 and December 31, 2009, respectively. “Throughout the current year, we’ve made consistent progress related to the ultimate resolution of our non-performing assets, which have declined by $2.3 million, or 24%, since the end of last year,” stated Mr. DiNapoli. Net Interest Income and Margin For the three and nine months ended September 30, 2010, average interest-earning assets were $278.6 million and $262.7 million, respectively, generating net interest income of $2.4 million and $7.3 million, respectively. For the three and nine months ended September 30, 2009, average interest-earning assets were $246.0 million and $250.4 million, respectively, generating net interest income of $2.5 million and $7.9 million, respectively. The Company’s net interest margin for the three and nine months ended September 30, 2010 were 3.46% and 3.73%, respectively, compared to 4.08% and 4.24% for the same periods last year, representing a decline of 62 and 51 basis points, respectively. These decreases were primarily due to decreases in the yield on earning assets of 84 and 66 basis points, respectively, compared to the same periods last year, partially offset by declines of 38 and 20 basis points in the cost of interest bearing deposits and borrowings, respectively, compared to the same periods last year. The decreases in yield on earning assets were primarily the result of an increase in the average balance of lower yielding interest earning deposits at other financial institutions. For the three and nine months ended September 30, 2010, the average balances of interest bearing deposits at other financial institutions were $69.4 million and $46.1 million, respectively, compared to $4.9 million and $1.7 million for the same periods last year. During the three and nine months ended September 30, 2010, interest bearing deposits at other financial institutions yielded 29 and 26 basis points, respectively. During the three and nine months ended September 30, 2010, the cost of interest bearing deposits and other borrowings declined by 38 and 20 basis points, respectively, compared to the same periods last year. The decline in our cost of interest bearing deposits and other borrowings was attributable to the decline in the average volume of our borrowings, which decreased by $9.8 million and $20.7 million for the three and nine months ended September 30, 2010, respectively, as compared to the same periods last year. In addition, the cost of interest bearing deposits and other borrowings were impacted by a decrease in our cost of certificates of deposit, which decreased by 31 and 26 basis points, respectively, during the three and nine months ended September 30, 2010 compared to the same periods last year, as these deposits repriced to lower current market interest rates. Non-Interest Income Non-interest income was $223,000 for the three months ended September 30, 2010 compared to $301,000 for the same period last year. This decrease in non-interest income was primarily due to decreases in loan arrangement fees and gain on sale of other real estate owned of $56,000 and $56,000, respectively, partially offset by an increase in service charges and other operating income of $20,000 and a decline in losses incurred in connection with the sale of AFS securities of $14,000. For the nine months ended September 30, 2010, non-interest income was $662,000 compared to $776,000 for the same period last year. The decrease in non-interest income was primarily due to decreases in loan arrangement fees and gain on sale of other real estate owned of $93,000 and $56,000, respectively, partially offset by an increase in gain on sale of AFS securities of $43,000. During the nine months ended September 30, 2010, the Company disposed of two agency mortgage-backed securities with an amortized cost of $3.8 million at the time of sale and recognized a $44,000 gain in connection with this transaction Non-Interest Expen Non-interest expense was $2.4 million and $7.4 million for the three and nine months ended September 30, 2010, respectively, compared to $2.3 million and $7.2 million for the three and nine months ended September 30, 2009, respectively, representing increases of $82,000, or 3.5%, and $211,000, or 2.9%, respectively. Income Tax Provision During the three and nine months ended September 30, 2010, we did not record an income tax provision related to our pretax earnings. Tax expense that would normally arise because of the Company’s earnings during the three and nine months ended September 30, 2010 is not recorded because it is offset by a reduction in the valuation allowance on the Company’s deferred tax asset. The income tax provision for the three and nine months ended September 30, 2009 was $3.4 million and $3.5 million, respectively. A 100% valuation allowance was provided against the deferred tax asset at September 30, 2009. The valuation allowance of $3.4 million was recorded as income tax expense. Net Income For the three months ended September 30, 2010 and 2009, the Company recorded net income of $155,000, or $0.02 per diluted share, and a net loss of $4.6 million, or $0.50 per diluted share, respectively. During the three months ended September 30, 2010, net income was positively impacted by declines in provisions for loan losses and income tax provision of $1.6 million and $3.4 million, respectively, as compared to the same period last year. These items were partially offset by declines in net interest income and non-interest income of $96,000 and $78,000, respectively, as well as an increase in total non-interest expenses of $82,000, each as compared to the same period last year. For the nine months ended September 30, 2010 and 2009, the Company recorded net income of $398,000, or $0.04 per diluted share, and a net loss of $4.3 million, or $0.47 per diluted share, respectively. During the nine months ended September 30, 2010, net income was positively impacted by declines in provisions for loan losses and income tax provision of $2.2 million and $3.5 million, respectively, as compared to the same period last year. These items were partially offset by declines in net interest income and non-interest income of $618,000 and $114,000, respectively, and an increase in total non-interest expenses of $211,000, each as compared to the same period last year. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly-owned subsidiary, 1st Century Bank, N.A., is a full service business bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is serving the specific banking needs of entrepreneurs, professionals and small businesses with the personal service of a traditional community bank, while offering the technologies of a big money center bank. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a further decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason.
1ST CENTURY BANK NAMED ONE OF THE BEST PLACES TO WORK LOS ANGELES, CA – August 30, 2010 – 1st Century Bank, N.A. (NASDAQ: FCTY) was honored Wednesday, August 4th as one of the Best Places to Work in Los Angeles by the Los Angeles Business Journal. This was the second time that 1st Century Bank was recognized. Participants were ranked based on the results of an employee survey and an evaluation of each company’s benefits, policies and offerings. The LA Business Journal worked with the Professionals in Human Resources Association (PIHRA), the Los Angeles Area Chamber of Commerce and the Best Companies Group to create the program. This is the second time that 1st Century Bank has received this honor by the Los Angeles Business Journal. The awards luncheon was held at the Millennium Biltmore Hotel in Los Angeles and was attended by the top 75 Best Places to Work. The final list will be published later this month by the Los Angeles Business Journal. About 1st Century Bancshares, Inc.
1ST CENTURY BANCSHARES, INC. ANNOUNCES STOCK REPURCHASE PROGRAM Los Angeles, CA (August 16, 2010) – 1st Century Bancshares, Inc. (NASDAQ: FCTY), the holding company of 1st Century Bank, N.A. (the "Bank"), announced that the Company's Board of Directors authorized the purchase of up to $2.0 million of its common stock, which represents approximately 606,000 shares based on its common stock closing price as of August 13, 2010, or approximately 6.5% of the total common shares outstanding as of June 30, 2010. "This repurchase program reflects our continuing belief in the long-term value of our Company," said Alan I. Rothenberg, Chairman and CEO of 1st Century Bancshares, Inc. "In these uncertain economic times, we strongly believe there is considerable value in our common stock, which is currently trading at a substantial discount to our book value. Our capital ratios remain more than double the regulatory requirements to be considered ‘well capitalized’, with the Bank’s total risk based capital ratio of 22.9% at June 30, 2010. Assuming that all $2.0 million was utilized to purchase our common stock at June 30, 2010, our total risk based capital ratio would have been 21.8%, keeping the Bank more than the double the ‘well capitalized’ regulatory threshold of 10.0%." Shares may be repurchased by the Company in open market purchases or in privately negotiated transactions as permitted under applicable rules and regulations. Repurchases of common stock may also be made through a 10b-18 plan. The repurchase program may be modified, suspended or terminated by the Board at any time without notice. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations. About 1st Century Bancshares, Inc.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS Los Angeles, CA (August 10, 2010) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the three and six months ended June 30, 2010. “I am encouraged by our second quarter results, which continue to show our progress despite challenging economic conditions. We closed the quarter with over $280 million in total assets, which is the largest reported asset size in our Company’s history, and we remained profitable reporting net income of $119,000. Our successful growth is primarily attributable to our increasing core deposit franchise, which has grown by approximately 20% since the beginning of the year. By offering a safe and sound home for our customers’ deposits, we’ve been able to build a stronger and more robust franchise, which I believe is well positioned to emerge from the current recession,” stated Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares, Inc. Mr. Rothenberg continued, “We’re also maintaining our aggressive straightforward approach to problem credits resulting in a 12% decline in non-performing loans during the first six months of this year, and our ratio of allowance for loans losses to total loans remains at approximately 3.0%. In addition, our capital ratios continue to be more than double the regulatory requirements to be considered ‘well capitalized’. At June 30, 2010, the Bank’s total risk based capital ratio was 22.9% compared to the regulatory requirement of 10.0%, with all of our capital being common equity; with no preferred stock, no trust preferred stock, no troubled asset relief program (“TARP”) funds, and no other synthetic equity instruments.” Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. stated, “I’m cautiously optimistic regarding the general economic recovery, as well as the growth opportunities that this recovery may bring. Our strategic focus has been, and continues to be on further developing our core deposit franchise, and we continue to benefit from disenfranchised customers that are leaving bigger banks for our service and the community business banking experience. During the quarter, we celebrated breaking the $100 million barrier for our customer demand deposit and NOW accounts. In addition to the substantial growth in the dollar volume of our core deposits, I’m equally encouraged by the growth in the number of our core customer accounts, which have increased by over 15% since the beginning of the year.” 2010 Second Quarter and Year-To-Date Highlights • The Bank’s total risk-based capital ratio was 22.87% at June 30, 2010, which is above the regulatory standard of 10.00% for “well-capitalized” financial institutions. The Bank’s capital does not include any funding received in connection with TARP, which we declined to apply for and participate in, nor other forms of capital such as trust preferred securities, convertible preferred stock or other equity or debt instruments. • Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits, savings and money market deposits, were $160.5 million and $133.9 million at June 30, 2010 and December 31, 2009, respectively, representing an increase of $26.6 million, or 19.9%. At June 30, 2009, total core deposits were $108.5 million, representing an increase of $52.0 million, or 47.9%, during the past 12 months. • As of June 30, 2010, the allowance for loan losses was $4.9 million, or 2.98% of gross loans, compared to $5.5 million, or 3.01% of gross loans, at December 31, 2009. • Non-performing loans totaled $8.6 million and $9.8 million at June 30, 2010 and December 31, 2009, respectively. The decline in non-performing loans was primarily attributable to loan paydowns received and charge-offs incurred during the current period. • Net interest margin was 3.80% and 3.88% for the three and six months ended June 30, 2010, respectively, compared to 4.26% and 4.33% for the same periods last year. • For the three and six months ended June 30, 2010, the Company recorded net income of $119,000, or $0.01 per diluted share, and $243,000, or $0.03 per diluted share, respectively, compared to net income of $118,000, or $0.01 per diluted share, and $248,000, or $0.03 per diluted share, for the same periods last year. Capital Adequacy At June 30, 2010, the Company’s stockholders’ equity totaled $47.1 million compared to $46.3 million at December 31, 2009. The increase was primarily related to an increase in unrealized gain on our available for sale investment portfolio and net income earned for the six months ended June 30, 2010. At June 30, 2010, the Bank’s total risk-based capital ratio, tier 1 capital ratio, and leverage ratio were 22.87%, 21.60%, and 16.07%, respectively, and were more than double the regulatory requirements for “well-capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Balance Sheet Total assets increased 2.9%, or $8.0 million, to $280.1 million at June 30, 2010, from $272.1 million at December 31, 2009. This increase in total assets was primarily attributable to an increase in cash and cash equivalents, partially offset by decreases in gross loans and our available for sale investment portfolio. Cash and cash equivalents increased $27.9 million from $45.9 million at December 31, 2009 to $73.8 million at June 30, 2010. The increase in cash and cash equivalents was primarily attributable to the increase in deposits generated during the first six months of the year, as well as the cash flows received in connection with the decline in loans. Gross loans at June 30, 2010 were $166.1 million, representing a decrease of $15.6 million, or 8.6%, from $181.7 million at December 31, 2009. The decrease in gross loans was primarily attributable to loan amortization and paydowns and, to a lesser extent, loan charge-offs. The Company sold two available for sale securities totaling $3.8 million during the three months ended June 30, 2010, resulting in a realized gain of $44,000. Total liabilities increased by $7.1 million to $232.9 million as compared to $225.8 million at December 31, 2009. This increase was primarily due to a $13.5 million increase in deposits, offset by a $6.5 million decline in other borrowings. At June 30, 2010, total deposits were $220.9 million compared to $207.4 million at December 31, 2009, representing an increase of 6.5% or $13.5 million. This increase was primarily due to increases in non-interest bearing demand deposits, interest bearing demand deposits and savings and money market deposits of $12.5 million, $6.1 million and $7.9 million, respectively, partially offset by a decrease in certificates of deposit of $13.1 million. The decrease in certificates of deposit was primarily attributable to a decrease of $5.0 million in State of California Treasurer’s Office certificates of deposit. The increase in non-interest bearing, as well as interest bearing demand deposits was primarily the result of our efforts to specifically focus on growing our core deposit franchise. Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and savings and money market deposits, were $160.5 million and $133.9 million at June 30, 2010 and December 31, 2009, respectively, representing an increase of $26.6 million, or 19.9%. Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses (“ALL”) was $4.9 million, or 2.98% of our total loan portfolio, at June 30, 2010 as compared to $5.5 million, or 3.01% of our total loan portfolio, at December 31, 2009. The provision for loan losses was $100,000 for the three and six months ended June 30, 2010, compared to $374,000 and $647,000, respectively, for the same periods last year. During the three and six months ended June 30, 2010, we had net charge-offs of $655,000 and $631,000, respectively, compared to net recoveries of $65,000 and net charge-offs of $1.1 million during the same periods last year. Management believes that the ALL as of June 30, 2010 and December 31, 2009 was adequate to absorb known and inherent risks in the loan portfolio. Non-Performing Assets Non-performing loans totaled $8.6 million and $9.8 million at June 30, 2010 and December 31, 2009, respectively. At June 30, 2010, non-accrual loans consisted of seven commercial loans totaling $2.2 million, three commercial real estate mortgage loans totaling $5.6 million, and two residential mortgage loans totaling $845,000. As a percentage of our total loan portfolio, the amount of non-performing loans was 5.20% and 5.40% at June 30, 2010 and December 31, 2009, respectively. “I’m encouraged by the progress we’ve made in connection with resolving our non-performing assets, which have declined by $1.2 million since the beginning of the year. We hope to build on this progress during the second half of the year by continuing to expeditiously resolve these credits, while limiting the impact to our current earnings,” stated Mr. DiNapoli. Net Interest Income and Margin For the three and six months ended June 30, 2010, average interest-earning assets were $255.3 million and $254.6 million, respectively, generating net interest income of $2.4 million and $4.9 million, respectively. For the three and six months ended June 30, 2009, average interest-earning assets were $250.6 million and $252.6 million, respectively, generating net interest income of $2.7 million and $5.4 million, respectively. The Company’s net interest margin for the three and six months ended June 30, 2010 were 3.80% and 3.88%, respectively, compared to 4.26% and 4.33% for the same periods last year, representing a decline of 46 and 45 basis points, respectively. These decreases were primarily due to decreases in the yield on earning assets of 58 and 55 basis points, respectively, compared to the same periods last year, partially offset by declines of 16 and 11 basis points, respectively, compared to the same periods last year, in the cost of interest bearing deposits and borrowings. The decrease in yield on earning assets was primarily the result of an increase in the average balance of lower yielding interest earning deposits at other financial institutions. For the three and six months ended June 30, 2010, the average balance of interest bearing deposits at other financial institutions was $40.1 million and $34.3 million, respectively, compared to $165,000 and $142,000 for the same periods last year. During the three and six months ended June 30, 2010, interest bearing deposits at other financial institutions yielded 22 basis points. During the three and six months ended June 30, 2010, the cost of interest bearing deposits and other borrowings declined by 16 and 11 basis points, respectively, compared to the same periods last year. The decline in our cost of interest bearing deposits and other borrowings was primarily attributable to the decline in the volume of our borrowings, which decreased by $22.3 million and $26.3 million for the three and six months ended June 30, 2010, respectively, as compared to the same periods last year. In addition, we experienced a decrease in our cost of certificates of deposit which decreased by 25 and 24 basis points, respectively, during the three and six months ended June 30, 2010 compared to the same periods last year, as these deposits repriced to lower current market interest rates. These items were partially offset by increases in the cost of borrowings of 113 and 137 basis points, respectively, compared to the same periods last year. Non-Interest Income Non-interest income was $210,000 for the quarter ended June 30, 2010 compared to $258,000 for the quarter ended June 30, 2009. For the three months ended June 30, 2010, the decrease in non-interest income was primarily due to decreases in loan arrangement fees and service charges and other operating income of $55,000 and $22,000, respectively, compared to the same period last year, partially offset by an increase in gain on sale of available for sale securities of $29,000. For the six months ended June 30, 2010, non-interest income was $439,000 compared to $475,000 for the same period last year. The decrease in non-interest income of $36,000 for the six months ended June 30, 2010 as compared to the same period in the prior year was primarily due to a decrease in loan arrangement fees from $287,000 for the six months ended June 30, 2009 to $250,000 for the six months ended June 30, 2010. Non-Interest Expense Income Tax Provision During the three and six months ended June 30, 2010, we did not record an income tax provision related to our pretax earnings because of our cumulative losses since inception. Tax expense that would normally arise because of the Company’s earnings during the three and six months ended June 30, 2010 is not recorded because it is offset by a reduction in the valuation allowance on the Company’s deferred tax asset. The income tax provision for the three and six months ended June 30, 2009 was $52,000 and $136,000, respectively, and resulted in an effective tax rate of 30.6% and 35.4%, respectively. Net Income For the three months ended June 30, 2010 and 2009, the Company recorded net income of $119,000, or $0.01 per diluted share, and $118,000, or $0.01 per diluted share, respectively. During the three months ended June 30, 2010, net income was positively impacted by declines in provision for loan losses and income tax provision of $274,000 and $52,000, respectively, as compared to the same period last year. These declines were offset by declines in net interest income and non-interest income of $244,000 and $48,000, respectively, as well as an increase in total non-interest expenses of $33,000, each as compared to the same period last year. For the six months ended June 30, 2010 and 2009, the Company recorded net income of $243,000, or $0.03 per diluted share, and $248,000, or $0.03 per diluted share, respectively. During the six months ended June 30, 2010, net income was positively impacted by declines in provision for loan losses and income tax provision of $547,000 and $136,000, respectively, as compared to the same period last year. These items were primarily offset by a decline in net interest income of $523,000 and an increase in total non-interest expenses of $129,000, as compared to the same period last year. Other Matters The Company announced that Robert Moore, who had been serving as Chief Credit Officer of the Bank for the past year, will be succeeded by J. Kevin Sampson, a veteran of over 16 years at Union Bank, N.A. Mr. Sampson has been working with Mr. Moore for the past year as our Senior Vice President of Credit Administration. Mr. Moore will resume his previous position as Chairman of the Bank’s Directors Loan Committee. The Company also announced that Matthew Horn was promoted to Senior Vice President, Chief Lending Officer. Mr. Horn was previously the Bank’s Senior Vice President, Chief Underwriter. Mr. Rothenberg stated, “We are fortunate to have the continuing involvement of Bob Moore, as well as the services of Kevin Sampson as our Chief Credit Officer and Matt Horn as our Chief Lending Officer. We will benefit from their collective experience and knowledge as we continue our successful emergence from the difficult economic period our country has faced in a healthy, safe and sound position.” About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly-owned subsidiary, 1st Century Bank, N.A., is a full service business bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is serving the specific banking needs of entrepreneurs, professionals and small businesses with the personal service of a traditional community bank, while offering the technologies of a big money center bank. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a further decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason.
The following tables present relevant financial data from the Company’s recent performance (dollars in thousands, except per share data):
*Percentages are reported on an annualized basis.
1st CENTURY BANK SPONSORED 3RD ANNUAL WALK FOR WISHES Los Angeles, CA – June 4, 2010 – 1st Century Bank (NASDAQ: FCTY) sponsored and participated in the Make-A-Wish Foundation of Greater Los Angeles’ 3rd Annual Walk for Wishes. The event took place on Saturday, May 15th and raised over $200,000. The funds raised will be used to help grant the wishes of more than 30 children in Los Angeles County. “1st Century Bank was honored to sponsor and participate in the 3rd Annual Walk for Wishes,” said President, Jason P. DiNapoli. “As a local Southern California community bank, we are committed to giving back to the very community in which we work and live. To help make a child’s wish come true, is the ultimate form of giving.” About Make-A-Wish Foundation 1st Century Bank had a team of 10 walkers. The team of staff, family and friends enjoyed the event and look forward to participating in the 4th Annual Walk for Wishes next year. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS Los Angeles, CA (April 23, 2010) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the quarter ended March 31, 2010. “I am pleased to see that our year-end actions appear to be bearing fruit. We have returned to profitability, reporting $124,000 of net income for the current quarter. Non-performing loans declined approximately 8% from year-end and we increased our loan loss reserve to approximately 3.2% of outstanding loans. Our core deposits are up 36% from the same period last year; and we remain very liquid, including a loan to deposits ratio of 85%. Our capital ratios are strong at 21.62% total risk based capital compared to the regulatory required 10%, with all of our capital being common equity; no preferred stock, no trust preferred stock, no troubled asset relief program (“TARP”) funds, and no other synthetic equity instruments,” stated Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares, Inc. “As the country’s economy appears to be starting to recover, we believe we are extremely well positioned to enjoy quality growth for our shareholders and a continued safe environment for our depositors.” “Core deposit relationships are the foundation of our franchise,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “So far in 2010, our sales team has successfully attracted new customer relationships and has demonstrated an ability to grow deposits in any economic environment. We’re continuing to see opportunities in our market, and community business banks like 1st Century that are focused on relationship banking are filling a void left by both larger financial institutions and failed banks.” 2010 1st Quarter Highlights • The Bank’s total risk-based capital ratio was 21.62% at March 31, 2010, which is substantially above the regulatory standard of 10.0% for “well-capitalized” financial institutions. The Bank’s capital does not include any funding received in connection with TARP, which we declined to apply for and participate in, nor other forms of capital, such as trust preferred securities, convertible preferred stock or other equity or debt instruments. • Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and savings and money market deposits, were $145.5 million and $133.9 million at March 31, 2010 and December 31, 2009, respectively, representing an increase of $11.6 million, or 8.6%. At March 31, 2009, total core deposits were $107.0 million, representing an increase during the current period of $38.5 million, or 36.0%, as compared to the prior period. • As of March 31, 2010, the allowance for loan losses was $5.5 million, or 3.19% of gross loans, compared to $5.5 million, or 3.01% of gross loans, at December 31, 2009. • Non-performing loans totaled $9.0 million and $9.8 million at March 31, 2010 and December 31, 2009, respectively. The decline in non-performing loans was primarily attributable to loan pay-downs received during the current quarterly period. • Net interest margin improved to 3.96% for the quarter ended March 31, 2010, compared to 3.80% for the quarter ended December 31, 2009. Net interest margin for the same period last year was 4.39%, representing a decline during the current quarter of 43 basis points, as compared to the prior period. • For the three months ended March 31, 2010 and 2009, the Company recorded net income of $124,000, or $0.01 per diluted share, and $130,000, or $0.01 per diluted share, respectively. Capital Adequacy At March 31, 2010, the Company’s stockholders’ equity totaled $46.8 million compared to $46.3 million at December 31, 2009. The increase was primarily related to the increase in unrealized gain on our Available for Sale investment portfolio and the net income for the quarter ended March 31, 2010. At March 31, 2010, the Bank’s total risk-based capital ratio, tier 1 capital ratio, and leverage ratio were 21.62%, 20.35%, and 15.89%, respectively, and were more than double the regulatory requirements for “well-capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Balance Sheet Total assets decreased 3.1%, or $8.5 million, to $263.6 million at March 31, 2010, from $272.1 million at December 31, 2009. This fluctuation in total assets was primarily attributable to a decrease in gross loans. Gross loans at March 31, 2010 were $172.7 million, which represents a decrease of $9.0 million, or 5.0%, from $181.7 million at December 31, 2009. This decrease was attributable to loan amortization and pay-downs incurred during the current period. Total liabilities decreased by $9.0 million to $216.8 million as compared to $225.8 million at December 31, 2009. This fluctuation was primarily due to a $3.7 million decrease in deposits and a $5.0 million decline in other borrowings. At March 31, 2010, total deposits were $203.6 million compared to $207.4 million at December 31, 2009, representing a decrease of 1.8% or $3.8 million. This decline was primarily due to a decrease in certificates of deposits of $15.3 million, partially offset by increases in non-interest bearing demand deposits, interest bearing demand deposits and savings and money market deposits of $3.9 million, $3.7 million and $3.9 million, respectively. The decrease in certificates of deposits was primarily attributable to a decrease of $5.0 million in State of California Treasurer’s Office certificates of deposit. The increase in non-interest bearing, as well as interest bearing demand deposits was the result of our efforts to specifically focus on growing our core deposit franchise. The decline in other borrowings was related to the maturity and repayment of a $5.0 million long-term borrowing in January 2010. Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses (“ALL”) was $5.5 million, or 3.19% of our total loan portfolio, at March 31, 2010 as compared to $5.5 million, or 3.01% of our total loan portfolio, at December 31, 2009. We did not record a provision for loan losses during the current period as it was determined that our ALL was adequate to support the known and inherent risk of loss in the loan portfolio, and for specific reserves required as of March 31, 2010. Non-Performing Assets Non-performing loans totaled $9.0 million and $9.8 million at March 31, 2010 and December 31, 2009, respectively. At March 31, 2010, non-accrual loans consisted of six commercial loans totaling $2.5 million, two real estate-commercial mortgage loans totaling $5.7 million, and two real estate-residential mortgage loans totaling $845,000. As a percentage of our total loan portfolio, the amount of non-performing loans was 5.21% and 5.40% at March 31, 2010 and December 31, 2009, respectively. “Despite the measured improvements in the economy, we’re continuing to focus resources on closely monitoring our loan portfolio and diligently working with borrowers to expeditiously resolve any remaining credit issues,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “Our policy in regards to credit has been consistent through this cycle as we continue to maintain a direct approach that enables us to deal candidly with any lending relationship that has a possible negative outlook.” Net Interest Income and Margin For the quarter ended March 31, 2010, average interest-earning assets were $253.9 million, generating net interest income of $2.5 million. For the quarter ended March 31, 2009, average interest-earning assets were $254.7 million, generating net interest income of $2.8 million. The Company’s net interest margin for the quarter ended March 31, 2010 was 3.96% compared to 3.80% for the quarter ended December 31, 2009. This 16 basis point improvement was primarily attributable to a 7 basis point increase in our loan yield and a 12 basis point decline in our cost of funds. The increase in our loan yield was primarily related to a decline in the average balance of non-performing loans. The accrual of interest has been suspended on all of our non-performing loans. Net interest margin for the same period last year was 4.39%. The decline of 43 basis points in net interest margin during the current quarter as compared to the same period last year was primarily due to a decrease in yield on earning assets of 51 basis points, partially offset by a 5 basis point decline in the cost of interest bearing deposits and borrowings. The decrease in yield on earning assets was primarily the result of an increase in the average balance of lower yielding interest earning deposits at other financial institutions. For the quarter ended March 31, 2010 and 2009, the average balance of interest bearing deposits at other financial institutions was $28.5 million and $119,000, respectively. During the three months ended March 31, 2010, the cost of interest bearing deposits and other borrowings declined by 5 basis points compared to the same period last year. This decrease was primarily attributable to the cost of our certificates of deposits declining by 25 basis points during the period, as these deposits repriced to lower current market interest rates, partially offset by the cost of money market deposits increasing by 8 basis points. “During the quarter, we continued to maintain an elevated level of lower yielding liquid assets on our balance sheet. Although this strategy may have a negative impact our current net interest margin, we continue to consider this is a prudent approach given the current economic environment, allowing us great flexibility as the economy recovers,” stated Mr. DiNapoli. Non-Interest Income Non-interest income was $229,000 for the quarter ended March 31, 2010 compared to $217,000 for the quarter ended March December 31, 2009. Non-interest income primarily consists of loan arrangement fees, loan syndication fees, service charges and fees on deposit accounts, as well as other operating income, which mainly consists of wire transfer fees. Non-Interest Expense Non-interest expense was $2.6 million for the quarter ended March 31, 2010 compared to $2.5 million for the quarter ended March 31, 2009, representing an increase of $96,000, or 3.9%. Compensation and benefits increased $72,000, or 5.4%, to $1.4 million for the three months ended March 31, 2010 from $1.3 million for the three months ended March 31, 2009. FDIC assessments increased $31,000 to $91,000 for the three months ended March 31, 2010 compared to $60,000 for the three months ended March 31, 2009. This increase was primarily due to an increase in the FDIC assessment rate and an increase in deposits as compared to March 31, 2009. Income Tax Provision During the three months ended March 31, 2010, we did not record an income tax provision related to our pretax earnings because of our cumulative losses since inception. Tax expense that would normally arise because of the Company’s earnings in the first quarter of 2010 is not recorded because it is offset by a reduction in the valuation allowance on the Company’s deferred tax asset. The income tax provision for the three months ended March 31, 2009 was $84,000 and resulted in an effective tax rate of 39.3%. Net Income For the three months ended March 31, 2010 and 2009, the Company recorded net income of $124,000, or $0.01 per diluted share, and $130,000, or $0.01 per diluted share, respectively. The decline in net income during the current period compared to the same period last year was primarily due to a $279,000 decrease in net interest income and a $96,000 increase in total non-interest expenses. These items were partially offset by a $273,000 decrease in provision for loan losses and an $84,000 decrease in income tax provision. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service business bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is serving small, community bank relationships with big bank technologies and services. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. Summary Financial Information The following tables present relevant financial data from the Company’s recent performance (dollars in thousands, except share data):
*Percentages are reported on an annualized basis.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS Los Angeles, CA (March 15, 2010) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for its fourth quarter and year ended December 31, 2009. “Despite the challenges that banks in general have been facing due to current economic conditions, I’m encouraged by 1st Century Bank’s ability and success in growing our core deposit franchise, which increased by over 33% during the year,” said Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares. “When the economy ultimately normalizes, I believe that we’ll be well positioned to continue to grow our franchise. Further, we have remained focused on ensuring that our capital ratios are well in excess of those required by our regulators and that our bank offers a safe environment for customer deposits. At December 31, 2009, the Bank’s total risk based capital ratio was double the regulatory requirement to be deemed “well capitalized” - 20.8% versus 10.0%. As we’ve grown core deposits, our cost of funds during the year has declined to 66 basis points and our cost of deposits has decreased to 49 basis points. Our liquidity, as measured by our loan-to-deposit ratio, has improved from 129.6% at the end of last year to 87.6% this year. In addition, we have aggressively focused on identifying, addressing and effectively resolving our problem assets, which resulted in $5.8 million of net charge-offs during the year and a provision for loan losses of $6.2 million. At December 31, 2009, our allowance for loan losses to total loans increased to a healthy 3.0%.” Rothenberg further commented, “The $7.8 million net loss for the year was primarily caused by the $6.2 million provision for loan losses and a $3.5 million deferred tax provision recorded during the third quarter, which was a non-cash accounting item that had no material effect on our regulatory capital.” Rothenberg added, “Our pre-tax, pre-provision earnings, which excludes the impact of these items, was $1.8 million for the current year as compared to $1.7 million for the same period last year.” Pre-tax, pre-provision earnings figures, are presented because the Company believes adjusting its results to exclude tax and loan loss provisions provides stockholders with a more comparable basis for evaluating period-to-period operating results. A schedule reconciling GAAP net loss to pre-tax, pre-provision earnings is provided in the table below. Total deposits increased $53.1 million, or 34.4%, from $154.3 million at December 31, 2008 to $207.4 million at December 31, 2009. The increase in deposits resulted primarily from an increase in non-interest-bearing and interest-bearing demand deposits, as well as an increase in certificates of deposits, partially offset by a decrease in savings and money market deposits. 2009 Quarterly and Annual Financial Highlights • The Bank’s total risk-based capital ratio was 20.79% at December 31, 2009, which is substantially above the regulatory standard of 10.0% for “well-capitalized” financial institutions. The Bank’s capital consists entirely of common equity and does not include any funding received in connection with the troubled asset relief program (“TARP”), which we declined to apply for and participate in, nor other forms of capital, such as trust preferred securities, convertible preferred stock or other equity or debt instruments. • As of December 31, 2009, total assets were $272.1 million, representing an increase of $12.7 million, or 4.9%, from $259.4 million at December 31, 2008. • Gross loans decreased $18.3 million, or 9.2%, to $181.7 million at December 31, 2009 from $200.0 million at December 31, 2008 due to loan payoffs and paydowns, as well as charge-offs. • As of December 31, 2009, the allowance for loan losses was $5.5million, or 3.01% of gross loans, compared to $5.2 million, or 2.59% of gross loans, at December 31, 2008. • Provision for loan losses was $6.2 million for 2009 compared to $4.3 million for 2008. • Net interest margin for the fourth quarter of 2009 decreased 52 basis points to 3.80% compared to 4.32% for the fourth quarter of 2008. Net interest margin decreased to 4.13% from 4.63% comparing year ended December 31, 2009 to year ended December 31, 2008. • Income tax provision for the year ended December 31, 2009 was $3.5 million compared to an income tax benefit of $1.1 million for the year ended December 31, 2008. The income tax provision was related to recording of a valuation allowance against the Company’s deferred tax assets. • Net loss was $3.5 million or $0.39 per diluted share and $7.8 million or $0.86 per diluted share for the fourth quarter and the year ended December 31, 2009, respectively, compared to net loss of $1.9 million or $0.19 per diluted share and $1.5 million or $0.15 per diluted share for the fourth quarter and the year ended December 31, 2008, respectively. • During the year ended December 31, 2009, the Company completed its $5.0 million stock repurchase program that was launched in September 2008. Upon completion of this program, the Company had repurchased 1,163,800 shares of its common stock at an average discount to its book value of approximately 20%. Capital Adequacy At December 31, 2009, the Company’s stockholders’ equity totaled $46.3 million compared to $57.0 million at December 31, 2008. The decrease was primarily related to a net loss of $7.8 million for the year ended December 31, 2009, and the repurchase of 804,400 shares of common stock for a total cost to the Company of $3.2 million under the Company’s stock repurchase program during the year ended December 31, 2009. The Company concluded its stock repurchase program during 2009. Throughout this program, the Company repurchased 1,163,800 shares of common stock, or approximately 10% of the total outstanding common stock, at a discount of approximately 20% to its book value at that time. At December 31, 2009, the Bank’s total risk-based capital ratio, tier 1 capital ratio, and leverage ratio were 20.79%, 19.53%, and 15.33%, respectively, and were more than double the regulatory requirements for “well-capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Balance Sheet Total assets increased 4.9%, or $12.7 million, to $272.1 million at December 31, 2009, from $259.4 million at December 31, 2008. The growth in total assets was primarily due to an increase of $41.7 million in cash and cash equivalents, partially offset by decreases of $7.8 million and $18.5 million in investment securities and loans, net, respectively. Cash and cash equivalents totaled $45.9 million at December 31, 2009 and $4.2 million at December 31, 2008. The increase in cash and cash equivalents was primarily due to increased liquidity maintained at the current year end. This liquidity was primarily generated by growth in our deposits and the normal amortization within our loan and investment portfolios. Investment securities decreased 15.3% or $7.8 million from $50.8 million at December 31, 2008 to $43.1 million at December 31, 2009 primarily due to normal amortization of the portfolio. Loans, net of the allowance for loan losses and deferred cost/unearned fees, decreased 9.5% or $18.5 million from $194.8 million at December 31, 2008 to $176.3 million at December 31, 2009. The decrease in the loan portfolio during the current year was primarily the result of loan pay-offs and pay-downs, as well as loan charge-offs. Loan originations were $119.4 million and $169.0 million during the years ended December 31, 2009 and 2008, respectively. The decline in loan originations was primarily due to a reduction in customer demand. Total deposits increased $53.1 million, or 34.4%, from $154.3 million at December 31, 2008 to $207.4 million at December 31, 2009. The increase in deposits resulted primarily from an increase in non-interest-bearing and interest-bearing demand deposits, as well as an increase in certificates of deposit, partially offset by a decrease in savings and money market deposits. Non-interest-bearing demand deposits increased $27.5 million, or 68.4%, from $40.3 million at December 31, 2008 to $67.8 million at December 31, 2009. Interest-bearing demand deposits increased $11.7 million, or 142.5%, from $8.2 million at December 31, 2008 to $19.9 million at December 31, 2009. Savings and money market deposits decreased $5.9 million, or 11.2%, from $52.1 million at December 31, 2008 to $46.2 million at December 31, 2009. The increases in non-interest-bearing and interest-bearing demand deposits are primarily attributable to the Company’s continued marketing and sales efforts to expand the Bank’s core deposit franchise. Certificates of deposits increased $19.7 million, or 36.7%, from $53.7 million at December 31, 2008 to $73.4 million at December 31, 2009. The increase in certificates of deposit was primarily attributable to the Certificate of Deposit Accounts Registry Service (“CDARS”) program, which commenced in January 2009 and an additional $5.0 million in certificates of deposit from the State of California Treasurer’s Office. At December 31, 2009, the Bank had $12.0 million of CDARS related deposits. “We remain cautiously optimistic that we will continue to grow our deposit franchise and that this will result in future lending opportunities,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “We continue to see customer discontent with larger institutional banks and I truly believe that significant business opportunities exist within our market. Our sales force is focused on cultivating customer relationships through superior customer service and coordinated marketing efforts.” Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses was $5.5 million, or 3.01% of our total loan portfolio, at December 31, 2009 as compared to $5.2 million, or 2.59% of our total loan portfolio, at December 31, 2008. The change in the allowance for loan losses was due primarily to the provision for loan losses of $6.2 million, less net charge-offs of $5.8 million. The provision for loan losses was recorded to provide reserves adequate to support the known and inherent risk of loss in the loan portfolio, and for specific reserves required as of December 31, 2009. The provision for loan losses was $3.8 million and $6.2 million for the quarter and year ended December 31, 2009, respectively, compared to $3.6 million and $4.3 million for the same periods a year ago. Non-performing Assets Non-performing loans totaled $9.8 million and $5.7 million at December 31, 2009 and 2008, respectively. The fluctuation in non-performing loans was primarily caused by gross increases of $4.6 million in commercial loans and $5.2 million in commercial real estate loans, partially offset by charge-offs of $1.5 million and $2.7 million, respectively. Non-performing loans were further impacted by $1.6 million of charge-offs related to consumer and other loans. During the year ended December 31, 2009, 86.30% of the loan charge-offs related to five lending relationships. These charge-offs were primarily recorded in connection with a decline in real estate collateral values incurred during the year. As a percentage of our total loan portfolio, the amount of non-performing loans was 5.40% and 2.85% at December 31, 2009 and 2008, respectively. “We remain intensely focused on effectively managing through this credit cycle and working closely with our borrowers during this difficult economic environment,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “We are committed to addressing loan problems directly and expeditiously to allow us to focus on future opportunities as the economy gradually recovers.” Net Interest Income and Margin For the quarter and the year ended December 31, 2009, average interest-earning assets were $258.2 million and $252.4 million, respectively, generating net interest income of $2.5 million and $10.4 million, respectively. For the quarter and year ended December 31, 2008, average interest-earning assets were $252.2 million and $241.4 million, respectively, generating net interest income of $2.7 million and $11.2 million, respectively. The growth in average earning assets during the quarter and year ended December 31, 2009 was primarily related to interest-earning deposits at other financial institutions, which was primarily funded by an increase in deposits and borrowings. The Company’s net interest margin for the quarter ended December 31, 2009 was 3.80% compared to 4.32% for the quarter ended December 31, 2008. The 52 basis point decrease in net interest margin was primarily due to a decrease in yield on earning assets of 93 basis points, partially offset by a decrease of 66 basis points in the rate paid for interest-bearing deposits and borrowings. The decrease in yield on earning assets was primarily the result of a 35 basis point decrease in loan yield and an increase in the average balance of lower yielding interest-earning deposits at other financial institutions. The decline in yield earned on our loan portfolio was primarily attributable to the increase in our average non-accrual loans outstanding during the quarter and new loan originations, which were originated at lower current market interest rates. The Company’s net interest margin was 4.13% and 4.63% for the years ended December 31, 2009 and 2008, respectively. The 50 basis point decline in net interest margin was primarily due to a decrease in yield on earning assets of 113 basis points, partially offset by a 105 basis point decline in the cost of interest-bearing deposits and borrowings. The decrease in yield on earning assets was primarily the result of a 118 basis point decrease in the Company’s loan yield and, to a lesser extent, an increase in the average balance of lower yielding interest-earning deposits at other financial institutions. As discussed above, the decline in yield earned on our loan portfolio was primarily attributable to the increase in our average non-accrual loans outstanding during the year and new loan originations, which were originated at lower current market interest rates. Non-Interest Income Non-interest income was $250,000 for the quarter ended December 31, 2009 compared to $252,000 for the quarter ended December 31, 2008. Non-interest income was $1.0 million for the year ended December 31, 2009 compared to $581,000 for the year ended December 31, 2008. The increase in non-interest income of $445,000 was primarily due to an increase in loan arrangement fees from $354,000 in 2008 to $734,000 in 2009, and an increase in service charges and other operating income from $177,000 in 2008 to $267,000 in 2009. Non-Interest Expense Non-interest expense was $2.4 million for the quarter ended December 31, 2009 compared to $2.7 million for the quarter ended December 31, 2008, representing a decrease of $273,000, or 10.1%. Non-interest expense was $9.6 million for the year ended December 31, 2009 compared to $10.1 million for the year ended December 31, 2008, representing a decrease of $453,000, or 4.5%. Compensation and benefits increased $142,000 or 12.5%, to $1.3 million for the quarter ended December 31, 2009 from $1.1 million for the quarter ended December 31, 2008. Compensation and benefits decreased $498,000, or 8.9%, to $5.1 million for the year ended December 31, 2009 from $5.6 million for the year ended December 31, 2008. FDIC assessments increased $63,000 to $91,000 for the quarter ended December 31, 2009 compared to $28,000 for the quarter ended December 31, 2008. The increase was primarily due to an increase in the FDIC assessment rate. This assessment increased $268,000 to $374,000 for the year ended December 31, 2009 compared to $106,000 for the year ended December 31, 2008. The increase during the year was primarily due to an increase in the assessment rate, as well as a $99,000 special FDIC assessment that was accrued and paid during the year ended December 31, 2009. Other operating expense decreased $217,000 to $486,000 for the quarter ended December 31, 2009 compared to $703,000 million for the quarter ended December 31, 2008. Other operating expense decreased $94,000, or 5.1%, to $1.8 million for the year ended December 31, 2009 compared to $1.9 million for the year ended December 31, 2008. Income Tax Provision (Benefit) The income tax provision for the quarter and year ended December 31, 2009 was none and $3.5 million, respectively compared to an income tax benefit of $1.4 million and $1.1 million, respectively for the same periods last year. At December 31, 2009, the Company had a valuation allowance of $5.3 million against its net deferred tax assets. This valuation allowance was established based on management’s assessment regarding the near-term likelihood of the Company’s ability to generate sufficient future taxable income to realize the benefits associated with these deferred tax assets. This non-cash charge did not affect the Company’s cash flows or liquidity and did not have a significant effect on the Bank’s regulatory capital ratios. Loss before Income Taxes The Company’s loss before income taxes for the quarter and the year ended December 31, 2009 was $3.5 million and $4.3 million, respectively. The Company’s loss before income taxes for the quarter and the year ended December 31, 2008 was $3.3 million and $2.6 million, respectively. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. # # # (Tables follow)
1st CENTURY BANK AND ALAN I. ROTHENBERG FEATURED IN HUFFINGTON POST BLOG LOS ANGELES – January 20, 2010 - 1st Century Bank and Alan I. Rothenberg are featured in a Huffington Post blog. To view this article, visit the following link.
LOS ANGELES – December 18, 2009 – 1st Century Bancshares, Inc. (NASDAQ: FCTY) (the “Company”), the holding company of 1st Century Bank, N.A. (the “Bank”), announced the completion of a stock repurchase program that was launched in September 2008. Prior to commencement of the stock repurchase program, the Company’s Board of Directors authorized the purchase of up to $5 million of the Company’s common stock over a 24 month period. The Company repurchased 1,163,800 shares of its common stock at an average price of $4.30, which represents approximately a 20% discount from its book value at September 30, 2009. Even after repurchasing approximately 10% of its outstanding common stock, the Bank remains one of the most well-capitalized banks in Southern California with a risk based capital ratio of 21.33% as of September 30, 2009, more than twice the amount regulators require to be categorized as "well-capitalized.” “The successful completion of the stock repurchase program not only reflects our belief in the value of the Company, but demonstrates that to our shareholders” said Alan I. Rothenberg, Chairman and CEO of 1st Century Bancshares. “During this past year of uncertainty, we’ve remained committed to delivering shareholder value through our stock repurchase program and ensuring that our customers are doing business with a bank that’s equally committed to its safety and security, as evidenced by our risk-based capital ratio of 21.33%.” About 1st Century Bancshares, Inc. Safe Harbor Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements, include, but are not limited to, 1st Century Bancshares’ ability to provide greater flexibility for capital planning and operational expansion, navigate the difficult banking environment, maintain strong loan loss reserves and remain well capitalized and implement operational enhancements. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, a decline in economic conditions and increased competition among financial service providers on 1st Century’s operating results, ability to attract deposit and loan customers and the quality of 1st Century’s earning assets; (2) government regulation; and (3) the other risks set forth in 1st Century’s reports filed with the U.S Securities and Exchange Commission. 1st Century does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason
1st CENTURY BANCSHARES, INC. ANNOUNCES NEW MEMBER ON EXECUTIVE TEAM BRAD SATENBERG IS APPOINTED CHIEF FINANCIAL OFFICER LOS ANGELES, CA – December 14th, 2009 – 1st Century Bancshares, Inc. (NASDAQ: FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), announced today the appointment of Bradley S. Satenberg as Executive Vice President and Chief Financial Officer, effective December 15, 2009. “We welcome Mr. Satenberg to our executive team here at 1st Century Bank,” said Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares. “Mr. Satenberg’s solid background in public accounting coupled with his banking experience will help us continue to build our franchise for many years to come.” Prior to joining 1st Century Bank, Mr. Satenberg was Managing Director and Deputy Chief Financial Officer of Imperial Capital Bancorp in Los Angeles, a $4 billion publicly held financial institution. He was responsible for financial and regulatory reporting, daily accounting and finance functions for the bank, including real estate investments and off-balance sheet securitization. Mr. Satenberg began his career with Arthur Andersen. In a 10 year period he rose to Senior Manager, Assurance Practice, focusing on financial markets industries with asset bases up to $15 billion, management of $800 million in investments and $1 billion in revenues. Other responsibilities included performing financial audits, SEC filings, and budgeting. Mr. Satenberg has a Bachelor of Business Administration, Accounting degree from the University of Texas at Austin. He is actively involved in his community, participates in a number of charities and resides in Sherman Oaks with his wife and two children. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY”. The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason.
1st CENTURY BANCSHARES, INC. SENDS LETTER TO CLIENTS AND SHAREHOLDERS 1st Century Bancshares Chairman, Alan I. Rothenberg and President and CEO Jason P. DiNapoli sent the following letter to clients and shareholders:Dear Client/Shareholder, As the enclosed graph displays, 1st Century Bank continues to be one of the most well-capitalized banks in Southern California. 1st Century Bank Capital Breakdown:
The key measurement of a bank’s health is its CAPITAL, and now more than ever this is of paramount importance. We have positioned our bank to withstand this current economic cycle and stand confidently poised for growth in the years to come. We are both shareholders and clients of this bank and have full faith in our board and the talented team we have built to continue moving this bank forward into a successful future. As always, feel free to contact either of us if you have any questions at all. Or better yet, come in and pay us a visit. Sincerely,
Alan I. Rothenberg | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
