First Choice Bank Reports Record Annual Earnings for 2015

Company Release - 2/1/2016

Financial highlights

  • Full Year 2015 Income was $5.393 million, up 32.44% from $4.072 million in the same period last year.
  • Total Income reached $1.738 million for the quarter ending December 31, 2015, up 12.42% from $1.546 million in the quarter ending September 30, 2015, and up 72.42% from $1.008 million in the quarter ending December 31, 2014.
  • Total assets reached $812.1 million at December 31, 2015, up 2.90% from $789.2 million at September 30, 2015, and up 29.63% from $626.5 million a year ago at December 31, 2014.
  • Net Loans were $657.7 million at December 31, 2015, up 3.98% from $632.4 million at September 30, 2015, and up 30.61% from $503.5 million a year ago at December 31, 2014.
  • Total deposits were $708.5 million at December 31, 2015, up 3.08% from $687.3 million at September 30, 2015, and up 32.15% from $536.1 million a year ago at December 31, 2014.
  • Total Common Equity increased to $92.4 million at December 31, 2015, up 2.16% from $90.5 million at September 30, 2015, and up 64.32% from $56.3 million a year ago at December 31, 2014.
  • Common Equity Tier 1, Tier 1 Risk-Based Capital and total Risk-Based Ratios were 13.17%, 13.17% and 14.43%, respectively, comparing very favorably to the well-capitalized requirements of 6.5%, 8% and 10%, respectively.

CERRITOS, Calif.--(BUSINESS WIRE)-- First Choice Bank, the “Bank” (OTCQX: FCBK), announced record earnings for the fourth quarter of 2015 of $1.738 million, and record year to date earnings of $5.393 million.

“2015 was an outstanding year for growth in all areas. We are especially pleased to show another year of record earnings,” said Peter Hui, Founder & Chairman of First Choice Bank.

The gross balance of loans held to maturity grew in the year to date to $669.1 million at December 31, 2015, from $512.2 million at December 31, 2014, a year over year increase of 30.64%. Compared to the balance of $643.2 million at September 30, 2015, gross loans grew by 4.03.

SBA Loan production was very solid in the quarter, and gain on sale premiums amounted to $0.8 million for the quarter, and $3.0 million for the full year 2015. This represented an increase of 12.00% from the $2.7 million premiums realized in 2014.

At the quarter end, total assets were $812.1 million, a year over year increase of 29.63% compared to the balance at December 31, 2014. In addition, at the quarter end, total deposits were $708.5 million, a year over year increase of 32.15% compared to the balance at December 31, 2014.

In order to accommodate the increase in the loan portfolio, the Bank provided $0.8 million to the Allowance for Loan and Lease Losses (the “ALLL”) in the quarter. At the quarter end, the ALLL stood at $11.4 million, or 1.71% of total loans. When combined with the amount of the discount on certain loans purchased in 2012, the ALLL and that discount amounted to 1.72% of the Bank’s total loans. At the quarter-end, the ALLL amounted to 291.70% of the Bank’s non-performing assets.

Earnings increased meaningfully to $1.738 million for the quarter, the ninth quarter in a row where the Bank earned over $1 million. This also represented a record for quarterly income for the Bank.

Robert M. Franko, President and CEO of the Bank, further commented, “We are really proud of the terrific Team effort for 2015. Our entire organization pulled together to make this a truly great year.”

The 30 days past due loans were $0.836 million, representing 0.12% of the total loan portfolio at the end of the quarter. In addition, there were 3 non-accrual loans in the amount of $3.913 million. All non-accrual loans remain fully current on contractual payments. There was no Other Real Estate Owned.

Total Capital at the quarter end was $92.4 million, a year over year increase of 64.32% compared to December 31, 2014. The Bank’s tangible book value per share at quarter-end was $13.24.

The Bank’s total investment portfolio at quarter end stood at $41.0 million, including $16.0 million in Held-to-Maturity status. The investment portfolio, combined with cash and due from banks of $97.4 million, provided the Bank with total Liquidity of $138.4 million.

At the quarter end, total deposits were $708.5 million, of which $158.4 million was in non-interest bearing demand deposits. The Bank’s Net Loan to Deposit ratio was 92.82% at the quarter-end.

Income for the quarter was generated from Net Interest Income of $7.6 million, combined with Non-Interest Income of $1.0 million. Gain on the sale of loans, primarily the guaranteed portions of SBA loans, accounted for $0.8 million of the Non-Interest Income. Non-interest expense in the quarter was $4.7 million. The Net Interest Margin for the year stood at 3.67%. The Bank’s efficiency ratio (measured quarterly) improved to 54.43% at year-end, compared to 56.74% at September 30, 2015, and 59.48% at December 31, 2014.

Selected Financial Highlights for the Year ending December 31, 2015:

Net after Tax Income of $1.738 million.
Pre-Tax, Pre-Provision Income of $3.921 million.
Return on average assets at 0.87%.
Return on average equity at 7.56%.
Allowance for Loan and Lease Losses at 1.71% of total loans.
Earnings per Share for the quarter were $0.30 (basic) and $0.29 (diluted), and for the year were $0.93 (basic) and $0.91 (diluted).
Book Value and Tangible Book Value per Share stood at $13.53 and $13.24 respectively.
Common Equity Tier 1, Tier 1 Risk-Based Capital and total Risk-Based Ratios at 13.17%, 13.17% and 14.43%, respectively, compared to 6.5%, 8% and 10%, respectively; which are the minimum levels required for a bank to be deemed “Well Capitalized” by the FDIC.

ABOUT FIRST CHOICE BANK

First Choice Bank, headquartered in Cerritos, California, is a community focused financial institution, serving diverse consumers and commercial clients and specializing in loans to small businesses, Commercial and Industrial (C&I) loans, and commercial real estate loans with a niche in providing finance for the hospitality industry. The Bank is a Preferred Small Business Administration (SBA) Lender. The Bank recently started a private banking operation. Founded in 2005, First Choice Bank has quickly become a leading provider of financial services that enable our customers to grow, maintain strength, and reach unprecedented levels of success. We strive to surpass our clients' expectations through our efficiency and professionalism and are committed to being "First in Speed, Service, and Solutions." First Choice Bank stock is traded on the Over the Counter (OTCQX); our Ticker Symbol is FCBK.

The Bank's web site is www.FirstChoiceBankCA.com.

Forward-Looking Statements

Except for the historical information in this news release, the matters described herein contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and charge-offs, results of examinations by our banking regulators, our ability to maintain adequate levels of capital and liquidity, our ability to manage loan delinquency rates, our ability to price deposits to retain existing customers and achieve low-cost deposit growth, manage expenses and lower the efficiency ratio, expand or maintain the net interest margin, mitigate interest rate risk for changes in the interest rate environment, competitive pressures in the banking industry, access to available sources of credit to manage liquidity, the local and national economic environment, and other risks and uncertainties.Accordingly, undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this release. First Choice Bank undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Investors are encouraged to read the First Choice Bank annual reports which are available on our website.

 
FIRST CHOICE BANK
FOURTH QUARTER REPORT / DECEMBER 31, 2015
 
BALANCE SHEET
(all amounts in thousand dollars except share and per share information)
 
      December 31,      

September 30,

      June 30,       March 31,       December 31,
2015

2015

2015 2015 2014
        (unaudited)       (unaudited)       (unaudited)       (unaudited)       (audited)
ASSETS                                        
 
Cash and due from banks $ 97,438 $ 103,058 $ 67,912 $ 72,563 $ 69,001
Investment securities 40,983 39,143 40,009 40,799 41,100
Stock Investments, restricted 3,236 3,236 3,236 2,971 2,970
 
Loans (gross) 669,141 643,195 604,680 562,080 512,212
Less : unaccreted disc. acquired loans (76 ) (134 ) (140 ) (160 ) (170 )
Less allowance for loan losses   (11,415 )   (10,612 )   (9,642 )   (9,092 )   (8,501 )
Loans, net 657,650 632,449 594,898 552,828 503,541
 
Premises and equipment, net 1,379 1,463 1,554 1,524 1,538
Other assets   11,400     9,861     10,062     9,568     8,323  
$ 812,086   $ 789,210   $ 717,671   $ 680,253   $ 626,473  
                                         
LIABILITIES AND SHAREHOLDERS' EQUITY                                
 
Noninterest bearing deposits $ 158,377 $ 145,236 $ 78,965 $ 73,457 $ 64,362
Interest checking accounts 229,650 262,168 269,896 239,392 205,462
NOW accounts 10,139 7,923 8,677 8,450 8,379
Money market accounts 98,116 50,507 40,340 43,964 45,355
Savings accounts 90,349 97,013 116,992 120,606 116,714
Certificates of deposits   121,866     124,494     99,777     101,511     95,845  
Total Deposits 708,498 687,341 614,646 587,380 536,117
Federal Home Loan Bank Borrowings 6,000 7,000 12,000 31,000 32,000
Other liabilities   5,153     4,390     4,209     3,874     2,104  
Total liabilities 719,651 698,731 630,855 622,254 570,221
 
Total shareholders' equity   92,435     90,479     86,816     57,999     56,252  
$ 812,086   $ 789,210   $ 717,671   $ 680,253   $ 626,473  
                                         
STATEMENT OF INCOME                                        
For the three months ended       For the twelve months ended
December 31, September 30, December 31, December 31, December 31,
2015 2015 2014 2015 2014
 
Interest income $ 8,978 $ 8,437 $ 7,016 $ 32,409 23,514
Interest expense   1,420     1,441     1,324     5,647     4,458  
Net interest income 7,558 6,996 5,692 26,762 19,056
Provision for loan losses   803     970     950     3,119     2,745  
Net interest income after provision for loan losses 6,755 6,026 4,742 23,643 16,311
Noninterest income 1,047 1,130 927 4,075 3,957
Noninterest expense   4,684     4,611     3,937     18,441     13,291  
Income before income taxes 3,118 2,545 1,732 9,277 6,977
Provision for income taxes   1,380     999     724     3,884     2,905  
Net income $ 1,738   $ 1,546   $ 1,008   $ 5,393     4,072  
 
Net income per share-basic ¹ $ 0.30 $ 0.27 $ 0.24 $ 0.93 $ 0.98

Net income per share-diluted ¹ ²

$

0.29

$

0.26

na

$

0.91

na

Weighted average shares - basic ¹ 5,790,439 5,789,820 4,154,578 5,790,439 4,154,578

Weighted average shares - diluted ¹ ²

5,918,499

5,907,789

na

5,918,499

na

Return on assets (annualized) 0.87 % 0.80 % 0.63 % 0.73 % 0.75 %
Return on equity (annualized) 7.56 % 6.89 % 7.47 % 7.02 % 8.99 %
Net interest margin 3.80 % 3.61 % 3.69 % 3.67 % 3.61 %
Efficiency ratio 54.43 % 56.74 % 59.48 % 59.80 % 57.75 %
                                         
SELECTED RATIOS                                        
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
Book value $ 13.53 $ 13.32 $ 13.01 $ 12.09 $ 11.89
Tangible book value $ 13.24 $ 13.04 $ 12.76 $ 11.76 $ 11.60
Allowance for loan losses as a percent of total gross loans 1.71 % 1.65 % 1.59 % 1.61 % 1.66 %
Nonperforming assets as a percent of total assets ³ 0.48 % 0.46 % 0.06 % 0.04 % 0.00 %
Allowance for loan losses as a percent of nonperforming assets 291.70 % 290.34 % 2114.47 % 3071.51 % >2000%
Net Loan to deposit ratio 92.82 % 92.01 % 96.79 % 94.12 % 93.92 %
Tier one leverage capital 11.65 % 11.73 % 12.30 % 9.19 % 8.96 %
Total risk based capital 14.43 % 14.76 % 14.99 % 11.19 % 11.23 %
 
(1) Per common share data has been adjusted for the 4% stock dividend issued to shareholders on the record of April 15, 2015.
(2) Prior to 2015, First Choice Bank shares were not listed or quoted on an exchange. Accordingly, the calculation of diluted shares using the treasury method had not been made.
(3) Nonperforming assets include nonaccrual loans, loans past due 90 days or more and still accruing, and other real estate owned.
 

First Choice Bank
Robert M. Franko, 562-345-9241
President & Chief Executive Officer
or
Yvonne L. Chen, 562-345-9244
Chief Financial Officer

Source: First Choice Bank