First Choice Bank Earnings Increase Substantially in Third Quarter

Financial highlights

• Total Income reached $1.546 million for the quarter ending September 30, 2015, up 39.5% from $1.108 million in the quarter ending June 30, 2015, and up 54.2% from $1.003 million in the quarter ending September 30, 2014.
• Year to Date Income reached $3.654 million, up 19.3% from $3.063 million in the same period last year.
• Total assets reached $789.2 million at September 30, 2015, up 10.0% from $717.7 million at June 30, 2015, and up 27.9% from $617.3 million a year ago at September 30, 2014.
• Net Loans were $632.4 million at September 30, 2015, up 6.3% from $594.9 million at June 30, 2015, and up 41.3% from $447.7 million a year ago at September 30, 2014.
• Total deposits were $687.3 million at September 30, 2015, up 11.8% from $614.6 million at June 30, 2015, and up 23.3% from $557.6 million a year ago at September 30, 2014.
• Total Common Equity increased to $90.5 million at September 30, 2015, up 4.2% from $86.8 million at June 30, 2015, and up 81.5% from $49.9 million a year ago at September 30, 2014. $1.519 million of the increase was attributed to the final tranche of a Capital Raise that was completed on July 1, 2015. The balance of the increase was as a result of the income in the quarter.
• $3.655 million in non-performing assets at September 30, 2015, which was 0.46% of total assets, compared to $456,000 in non-performing assets at June 30, 2015, which was 0.06% of total assets, and $0 non-performing assets at September 30, 2014.
• The Bank’s Allowance for Loan and Lease Losses increased to $10.6 million at September 30, 2015, which was 1.65% of total loans, and 290% of non-performing assets, compared to $9.6 million at June 30, 2015, which was 1.59% of total loans, and more than 2000% of non-performing assets, and compared to $7.6 million at September 30, 2014, which was 1.66% of total loans, and more than 2000% of non-performing assets.
• The Bank’s Efficiency Ratio improved to 56.8% at September 30, 2015, compared to 64.3% at June 30, 2015, and 59.7% at September 30, 2014.
• Common Equity Tier 1, Tier 1 Risk-Based Capital and total Risk-Based Ratios at 13.5%, 13.5% and 14.8%, compared 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 earnings for the third quarter of 2015 of $1,546 million, and year to date earnings of $3.654 million.

“Thanks to our growth in all of our lending and deposit generating areas, combined with our recent Capital raise, the Bank was able to achieve a very meaningful increase in net income in the quarter,” said Peter Hui, Founder & Chairman of First Choice Bank.

The gross balance of loans held to maturity grew in the year to date to $643.2 million at September 30, 2015, from $512.2 million at December 31, 2014, a year to date increase of 25.6%. Compared to the balance of $604.7 million at June 30, 2015, gross loans grew by 6.4%, and compared to the balance of $455.6 million at September 30, 2014, gross loans grew by 41.2%.

SBA Loan production was very solid in the quarter, and gain on sale premiums amounted to $0.9 million for the quarter, and $2.2 million for the year to date. This represented an increase of 64.6% from the $0.5 million premiums realized in the third quarter of 2014.

At the quarter end, total assets were $789.2 million, a year to date increase of 26.0% compared to the balance at December 31, 2014, and a 27.9% increase over the same quarter in 2014. In addition, at the quarter end, total deposits were $687.3 million, a year to date increase of 28.2% over December 31, 2014, and a 23.3% increase over the same quarter in 2014.

In order to accommodate the increase in the loan portfolio, the Bank provided $1.0 million to the Allowance for Loan and Lease Losses (the “ALLL”) in the quarter. At the quarter end, the ALLL stood at $10.6 million, or 1.65% of total loans. When combined with the amount of the discount on certain loans purchased in 2012, the ALLL and that discount amounted to 1.67% of the Bank’s total loans. At the quarter-end, the ALLL amounted to 290% of the Bank’s non-performing assets.

Earnings increased meaningfully to $1.546 million for the quarter, the eighth 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, “In this quarter growth continued, but the Bank also realized an increase in income to more than $1.5 million. We are pleased to see income now trending higher, as the benefit of our growth starts to affect our bottom line.”

The 30 days past due loans were $616,300, representing 0.1% of the total loan portfolio at the end of the quarter. In addition, there were two non-accrual loans in the amount of $3.655 million. Both non-accrual loans remain fully current on payments. One loan in the approximate amount of $3.4 million was extended when one of the borrower’s major clients experienced financial difficulties and stopped making payments on their receivables. Because the Bank extended the loan and termed out the balance, the loan was recorded as troubled debt (“TDR”) and placed on non-accrual. At this time, the Bank does not foresee any loss on the credit. There was no Other Real Estate Owned.

Total Capital at the quarter end was $90.5 million, a year to date increase of 26.0% over December 31, 2014, and a 27.9% increase over the same quarter in 2014. The Bank’s tangible book value per share at quarter-end was $13.04.

The Bank’s total investment portfolio at quarter end stood at $39.1 million, including $16.0 million in Held-to-Maturity status. With the $39.1 million investment portfolio, combined with cash and due from banks of $103.1 million, the Bank’s total Liquidity stood at $142.2 million.

At the quarter end, total deposits were $687.3 million, of which $145 million was in non-interest bearing demand deposits. The Bank’s Loan to Deposit ratio was 92.0% at the quarter-end. The level of demand deposits was increased with funds waiting to be used in real estate purchase transactions, and the quarter-end level may decrease in the future.

Income for the quarter was generated from Net Interest Income of $6.9 million, combined with Non-Interest Income of $1.2 million. Gain on the sale of loans, primarily the guaranteed portions of SBA loans, accounted for $0.9 million of the Non-Interest Income. Non-interest expense in the quarter was $4.6 million. The Net Interest Margin for the quarter and the year stood at 3.61% and 3.63%, respectively. The Bank’s efficiency ratio improved to 56.8% at September 30, 2015, compared to 64.3% at June 30, 2015, and 59.7% at September 30, 2014.

Selected Financial Highlights for the quarter ending September 30, 2015:

Net after Tax Income of $1.546 million.Pre-Tax, Pre-Provision Income of $3.5 million.Return on average assets annualized at 0.80%.Return on average equity annualized at 6.89%.Allowance for Loan and Lease Losses at 1.65% of total loans.Earnings per Share for the quarter were $0.27 (basic) and 0.26 (diluted).Earnings per Share annualized for the trailing twelve months as of the quarter-end stood at $0.81 (basic) and $0.79 (diluted).Book Value and Tangible Book Value per Share stood at $13.32 and $13.04 respectively.Common Equity Tier 1, Tier 1 Risk-Based Capital and total Risk-Based Ratios at 13.5%, 13.5% and 14.8%, 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
THIRD QUARTER REPORT / SEPTEMBER 30, 2015
BALANCE SHEET
(all amounts in thousand dollars except share and per share information)
				September 30,						June 30,						March 31,						December 31,						September 30,
				2015						2015						2015						2014						2014
				(unaudited)						(unaudited)						(unaudited)						(audited)						(unaudited)
ASSETS
Cash and due from banks				$	103,058					$	67,912					$	72,563					$	69,001					$	114,172
Investment securities					39,143						40,009						40,799						41,100						43,280
Stock Investments, restricted					3,236						3,236						2,971						2,970						2,970
Loans (gross)					643,195						604,680						562,080						512,212						455,572
Less : unaccreted disc. acquired loans					(134	)					(140	)					(160	)					(170	)					(341	)
Less allowance for loan losses					(10,612	)					(9,642	)					(9,092	)					(8,501	)					(7,551	)
Loans, net					632,449						594,898						552,828						503,541						447,680
Premises and equipment, net					1,463						1,554						1,524						1,538						1,258
Other assets					9,861						10,062						9,568						8,323						7,955
				$	789,210					$	717,671					$	680,253					$	626,473					$	617,315
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest bearing deposits				$	145,236					$	78,965					$	73,457					$	64,362					$	62,970
Interest checking accounts					262,168						269,896						239,392						205,462						202,773
NOW accounts					7,923						8,677						8,450						8,379						6,107
Money market accounts					50,507						40,340						43,964						45,355						50,673
Savings accounts					97,013						116,992						120,606						116,714						119,479
Certificates of deposits					124,494						99,777						101,511						95,845						115,597
Total Deposits					687,341						614,646						587,380						536,117						557,599
Federal Home Loan Bank Borrowings					7,000						12,000						31,000						32,000						8,000
Other liabilities					4,390						4,209						3,874						2,104						1,863
Total liabilities					698,731						630,855						622,254						570,221						567,462
Total shareholders' equity					90,479						86,816						57,999						56,252						49,853
				$	789,210					$	717,671					$	680,253					$	626,473					$	617,315
STATEMENT OF INCOME
				For the three months ended																		For the nine months ended
				September 30,						June 30,						September 30,						September 30,						September 30,
				2015						2015						2014						2015						2014
Interest income				$	8,341					$	7,924					$	6,020						23,125						16,357
Interest expense					1,441						1,513						1,271						4,227						3,134
Net interest income					6,900						6,411						4,749						18,898						13,223
Provision for loan losses					970						755						640						2,316						1,795
Net interest income after provision for loan losses					5,930						5,656						4,109						16,582						11,428
Noninterest income					1,226						1,072						1,186						3,334						3,200
Noninterest expense					4,611						4,810						3,542						13,758						9,384
Income before income taxes					2,545						1,918						1,753						6,158						5,244
Provision for income taxes					999						810						750						2,504						2,181
Net income				$	1,546					$	1,108					$	1,003						3,654						3,063
Net income per share-basic ¹				$	0.27					$	0.19					$	0.25					$	0.63					$	0.75
Net income per share-diluted ¹ ²				$	0.26					$	0.19						n/a					$	0.62						n/a
Weighted average shares - basic ¹					5,789,820						5,725,950						4,063,401						5,789,820						4,063,401
Weighted average shares - diluted ¹ ²					5,907,789						5,848,228						n/a						5,907,789						n/a
Return on assets (annualized)					0.80	%					0.63	%					0.81	%					0.69	%					0.80	%
Return on equity (annualized)					6.89	%					7.47	%					9.45	%					7.07	%					9.52	%
Net interest margin					3.61	%					3.68	%					3.31	%					3.63	%					3.56	%
Efficiency ratio					56.75	%					64.28	%					59.67	%					61.88	%					57.14	%
SELECTED RATIOS
				September 30,						June 30,						March 31,						December 31,						September 30,
				2015						2015						2015						2014						2014
Book value				$	13.32					$	13.01					$	12.09					$	11.89					$	11.48
Tangible book value				$	13.04					$	12.76					$	11.31					$	11.60					$	11.19
Allowance for loan losses as a percent of total gross loans					1.65	%					1.59	%					1.61	%					1.66	%					1.66	%
Nonperforming assets as a percent of total assets ³					0.46	%					0.06	%					0.04	%					0.00	%					0.00	%
Allowance for loan losses as a percent of nonperforming assets					290.34	%					2114.47	%					>2000	%					>2000	%					>2000	%
Net Loan to deposit ratio					92.01	%					96.79	%					94.12	%					93.92	%					80.29	%
Tier one leverage capital					11.73	%					12.30	%					9.19	%					8.96	%					8.53	%
Total risk based capital					14.76	%					14.99	%					11.19	%					11.23	%					11.15	%
(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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151027005657/en/

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

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• AI-powered cyber threats light a fire under cybersecurity stocks
• Phillip Securities Upgrades Indusind Bank Ltd (IIB:IN) to Buy
• Caldwell sells IQTalent subsidiary to WinMil for C$4.7M