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1st Enterprise Bank Announces Record Loan Growth

LOS ANGELES, CA--(Marketwire - Oct 18, 2012) - 1st Enterprise Bank ("the Bank") (OTC.BB:FENB), an independent full-service commercial bank serving the Southern California business community, reported growth in loans of $126 million, growth in deposits of $91 million and growth in total assets of $99 million over the prior year. Net income was $649,000 and income available to common shareholders was $608,000 for the quarter ended September 30, 2012.

Financial Highlights

  • Total Assets grew by 18%, from $563 million at September 30, 2011 to $662 million at September 30, 2012
  • Total Loans outstanding grew by $126 million or 50%, from $255 million at September 30, 2011 to $381 million at September 30, 2012
  • Total Deposits grew by $91 million or 18%, from $501 million at September 30, 2011 to $592 million at September 30, 2012
  • Net interest income of $4.8 million was highest in the Bank's history and 28% higher than the third quarter of 2011
  • Net interest margin grew to 3.08% from 2.96% in the third quarter of 2011, while the loan-to-deposit ratio increased from 51% to 64%
  • The Bank continued to have no charged-off or past due loans, or any non-performing assets
  • The Bank continues to be well capitalized with a Tier 1 Leverage Ratio of 9.6% and a Total Risk Based Capital Ratio of 13.3% -- tangible book value per share was $12.76 at quarter end
  • Net Income applicable to common shareholders was $608,000 for the third quarter of 2012, compared to $442,000 for the third quarter of 2011
  • Diluted earnings per common share were $.15 for the quarter, no change from the third quarter of 2011

"We are very pleased with 1st Enterprise Bank's continued strong level of organic growth resulting in record levels of loans, deposits and net interest income," said John Black, CEO. "This growth positions the Bank very well heading into the remainder of 2012, and provides tremendous momentum as we approach the start of 2013." Brian Horton, President, added, "We made some key hires during the third quarter, adding new relationship managers throughout the Bank. These hires, along with continued recruitment of talented bankers, will be a growth driver in the future."

For the three months ended September 30, 2012, net interest income before provision was $4.8 million, an increase of more than $1 million or 28% compared to the third quarter of 2011 and an increase of more than $175,000 or 4% compared to the second quarter of 2012. The year-over-year growth in net interest income was the result of both growth in earning assets and an increase in net interest margin. Earning assets were $621 million in the third quarter of 2012, a 24% or $118 million increase over the prior year. The net interest margin was 3.08% during the third quarter of 2012, compared to 2.96% for the prior year. The increase in net interest margin was mostly the result of a lower cost of funds, which declined from .21% in the prior year to.12% for the third quarter of 2012. Transaction account balances grew by $61 million from the prior year and non-interest bearing deposits comprised 46% of average total deposits in the third quarter. The sequential growth in net interest income was the net result of growth in earning assets of $71 million and a decline in net interest margin from 3.38% to 3.08%. The yield on earning assets declined by .30% from the prior quarter as the Bank maintained more than twice the level of funds at the Federal Reserve, while the yield on investment securities declined by .33%. During the third quarter a provision for loan losses, associated with the significant growth in loans during the quarter, was recorded in the amount of $745,000, as compared to $35,000 in the third quarter of 2011 and $240,000 in the second quarter of 2012. The Bank had no loan charge-offs during the quarter and has no non-accrual loans.

Non-interest income for the quarter increased by $261,000 or 38% from the prior year and increased by $48,000 or 5% from the prior quarter. Growth in non-interest income was attributable to growth in both loan related and deposit related fees. The third quarter of 2012 included gains on sale of securities totaling $18,000, compared to $116,000 in the prior quarter and $190,000 in the prior year.

Non-interest expense increased by $854,000 or 26% over the prior year and decreased by $63,000 or 2% over the prior quarter.

About 1st Enterprise Bank

Founded in 2006, 1st Enterprise Bank is a full-service commercial banking institution, whose highly experienced bankers personally serve Southern California entrepreneurial businesses, professional firms and nonprofit organizations, along with their owners and key managers. Headquartered in the Los Angeles financial district, with full-service regional banking offices in Irvine and Ontario, 1st Enterprise Bank offers a full range of credit and depository services, with special emphasis on superior customer service, sophisticated cash management services and direct access to bank decision makers. Customers work directly with a dedicated Relationship Manager, a seasoned professional who understands their unique challenges serving as a sounding board and an active participant in their client's success.

Forward-Looking Statement:

This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about 1st Enterprise Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: 1st Enterprise Bank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in 1st Enterprise Bank's reports and filings with banking regulatory agencies. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and 1st Enterprise Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

1st Enterprise Bank
Condensed Statements of Financial Condition

 
unaudited
Assets
9/30/2012
 
6/30/2012
 
9/30/2011
      Cash and due from banks
$ 21,058
 
$ 17,731
 
$ 24,670
       Interest earning deposits in other banks
15,357
 
37,465
 
17,321
            Total cash and cash equivalents


36,415   55,196   41,991
      Certificates of deposit in other banks 498   498   6,866
      Investment securities - available-for-sale 167,518   144,605   193,057
      Investment securities - held-to-maturity 56,114   57,067   49,196
      Loans, net of deferred loan fees 381,307   340,929   255,028
      Allowance for loan losses
(5,595)
 
(4,850)
 
(4,035)
      Loans, net of allowance for loan losses 375,712   336,079   250,993
      Bank owned life insurance 13,276   13,161   10,372
      Premises and equipment, net 2,274   2,407   2,527
       Accrued interest receivable and other assets
10,022
 
10,063
 
8,138
            Total Assets


$ 661,829
 
$ 619,076
 
$ 563,140
Liabilities          
      Non-interest-bearing demand deposits
$ 214,130
 
$ 215,355
 
$ 184,951
      Interest bearing transaction accounts 283,181   270,612   254,110
      Money market and savings accounts 254,110   254,110   254,110
      Time deposits
22,293
 
22,293
 
22,293
            Total Deposits 519,604   496,942   461,002
      Other liabilities
3,222
 
2,881
 
6,313
            Total Liabilities


527,826   516,824   467,315
Shareholders' Equity          
      Serial Preferred Stock 16,380   16,380   16,400
      Common Stock 43,008   42,982   28,910
      Retained Earnings 3,752   3,144   2,458
      Accumulated other comprehensive income
1,900
 
1,529
 
1,839
            Total Shareholders' Equity
65,040
 
64,035
 
49,607
Total Liabilities and Shareholders' Equity
$ 661,829
 
$ 619,076
 
$ 563,140

1st Enterprise Bank
Condensed Statements of Operations

 
Three Months Ended
 
unaudited
Interest Income
9/30/2012
 
6/30/2012
 
9/30/2011
      Interest and fees on loans
$ 3,957
 
$ 3,677
 
$ 2,970
      Interest on investment securities 987   1,109   1,027
      Other interest income
35
 
12
 
15
            Total interest income 4,979   4,798   4,012
Interest Expense
179
 
175
 
260
Net Interest Income 4,800   4,623   3,752
Provision for loan losses
745
 
240
 
35
Net Interest Income After Provision for Loan Losses

4,055   4,383   3,717
Non-interest Income          
Service charges, fees and other income 927   781   494
Gain on sale of investment sercurities
18
 
116
 
190
            Total non-interest Income


945   897   684
Non-interest Expenses          
      Compensation and benefit expenses 2,341   2,562   1,910
      Occupancy and equipment expenses 359   361   357
      Data processing 278   247   207
      Professional and legal 250   240   198
      Other operating expenses
850
 
731
 
552
            Total non-interest expense


4,078   4,141   3,224
Income Before Income Taxes
922
 
1,139
 
1,177
Provision for income taxes
273
 
335
 
413
Net Income
$ 649
 
$ 804
 
$ 764
Preferred dividends & Warrant amortization
41
 
41
 
322
Net Income Applicable to Common Shareholders


$ 608
 
$ 763
 
$ 442
Earnings Per Share          
Basic earnings per share
$ 0.16
 
$ 0.23
 
$ 0.16
Diluted earnings per share
$ 0.15
 
$ 0.22
 
$ 0.15
Average shares outstanding 3,790,359   3,315,021   2,818,500
Average fully diluted shares 4,002,939   3,505,846   2,955,842
Total Shares outstanding at end of period


3,814,539   3,805,039   2,838,500
Capital Ratios          
Tier 1 leverage ratio 9.6 %   10.6 %   8.7 %
Tier 1 risk-based capital ratio 12.1 %   13.4 %   13.0 %
Total risk-based capital ratio 13.3 %   14.5 %   14.2 %
Book value per share

$ 12.76
 
$ 12.52
 
$ 11.70
Performance Ratios          
Return on average assets 0.39 %   0.54 %   0.55 %
Return on average common equity 4.97 %   7.29 %   5.28 %
Net interest margin 3.08 %   3.38 %   2.96 %
Efficiency ratio

72.37 %   73.12 %   71.79 %
Average Balances          
Total Assets
$ 660,792
 
$ 593,877
 
$ 551,467
Earning Assets 620,656   550,050   502,389
Total Loans 356,425   325,867   249,359
Total Securities 210,271   200,677   225,621
Total Deposits 591,691   531,125   500,792
Common Equity 48,692   42,078   33,182

Contact:
John C. Black
CEO
213-430-7070

 

Copyright 2012, 1st Enterprise Bank, Inc. All rights reserved.