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1st Enterprise Bank Announces Net Income of $5 Million for 2013,
an Increase of 34% Over 2012

LOS ANGELES, CA  – (Marketwire - Jan 23, 2014) - 1st Enterprise Bank ("the Bank") (OTCBB: FENB), an independent full-service commercial bank serving the Southern California business community, reported net income of $1,187,000 for the quarter ending December 31, 2013 and full year net income of $5 million for 2013.

Financial Highlights

  • Net income for 2013 was $5,003,000, a 34% increase over 2012 net income of $3,732,000
  • Diluted earnings per common share were $1.18 for 2013, compared to $.98 in 2012
  • Total Assets grew by 8% in 2013, ending the year at $760 million
  • Total Loans outstanding grew by $96 million or 24% in 2013, ending the year at $505 million
  • Total Deposits grew by $31 million or 5% in 2013, ending the year at $643 million
  • Net income was $1,187,000 for the fourth quarter of 2013 and diluted earnings per common share were $.28 for the quarter
  • Income before taxes, loan loss provision and gain on sale of securities was $2,267,000 for the fourth quarter, a 36% increase over the prior year and a 7% increase over the third quarter

John Black, CEO, stated, "We are very pleased to announce that 1st Enterprise Bank achieved record earnings of $5 million in 2013 and continued to generate strong loan growth, with loans increasing by $96 million, or 24% from the end of 2012. Net interest income continued to grow, as reflected in the 19% increase over the prior year. Excluding gain on the sale of securities, the Bank also grew non-interest income by 13%." Brian Horton, President, added, "In addition to our strong revenue and earnings growth, we continued to invest in our staff and our physical locations. The Bank opened a new San Fernando Valley regional loan production office during the year and added five experienced relationship managers throughout the Bank."

Net interest income before loan loss provision was $21.9 million in 2013, a $3 million or 16% increase over the prior year. The growth in net interest income was the result of both growth in earning assets and an increase in net interest margin. Earning assets grew by $85 million or 15% over 2012. Net interest margin increased from 3.23% in 2012 to 3.27% in 2013, as a result of a .03% increase in the earning asset yield and a .01% decrease in the Bank's cost of funds. The provision for loan loss was $1,322,000 in 2013, declining by $186,000 from 2012. Net loan charge-offs for 2013 were $315,000 and non-accrual loans totaled $1.8 million at December 31, 2013.

Non-interest income, excluding gain on sale of securities, was $3.6 million in 2013, an increase of more than $400,000 or 13% over 2012.

Non-interest expense in 2013 grew by $827,000 or 5% over 2012 to $16.9 million. The majority of this growth was increased staff and benefit expense, totaling $648,000, as the Bank continued to expand its staffing levels to support current and future customer growth. In addition, occupancy expense grew by $128,000 resulting from the new loan production office in the San Fernando Valley.

For the quarter ended December 31, 2013, net interest income before provision was $5.8 million, an increase of $700,000 or 14% compared to the fourth quarter of 2012, and an increase of more than $300,000 or 6% compared to the third quarter of 2013. The growth in net interest income was the result of both growth in earning assets and an increase in net interest margin. Average earning assets were $697 million in the fourth quarter of 2013, a 7% increase over the prior year and a 4% increase from the prior quarter. Net interest margin was 3.30% for the fourth quarter, compared to 3.13% and 3.23% for the prior year and prior quarter, respectively. The increase in net interest margin resulted from an increase in the earning asset yield, while cost of funds was stable at 0.11%. The provision for loan loss was $710,000 in the fourth quarter of 2013 compared to $513,000 in the fourth quarter of 2012 and $4,000 in the third quarter of 2013. There were no loan charge-offs during the fourth quarter, but one loan totaling $1.8 million was placed on non-accrual.

Non-interest income was $1 million in the fourth quarter of 2013. Excluding gains on sale of securities, non-interest income increased by $290,000 and $120,000 over the prior year and prior quarter, respectively. Non-interest expense in the fourth quarter of 2013 grew by more than $380,000 or 9% over 2012, and grew by $300,000 or 7% over the third quarter of 2013.

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. For more information on 1st Enterprise Bank, please visit www.1stenterprisebank.com.

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

 
12/31/2013
 
9/30/2013
 
12/31/2012
Assets
unaudited
 
unaudited
 
audited
      Cash and due from banks
$ 12,126
 
$ 25,030
 
$ 14,520
       Interest earning deposits in other banks
5,793
 
11,708
 
23,386
            Total cash and cash equivalents 17,919   36,738   37,906
      Certificates of deposit in other banks -   2,241   2,490
      Investment securities - available-for-sale 148,809   144,462   180,491
      Investment securities - held-to-maturity 62,118   61,274   56,026
      Loans, net of deferred loan fees 505,258   463,998   408,767
      Allowance for loan losses
(6,517)
 
(5,805)
 
(5,510)
      Loans, net of allowance for loan losses 498,741   458,193   403,257
      Bank Owned Life Insurance 16,411   16,281   13,389
      Premises and equipment, net 2,453   2,536   2,256
       Accrued interest receivable and other assets
13,550
 
9,612
 
10,323
            Total Assets
$ 760,001
 
$ 731,337
 
$ 706,138
Liabilities          
      Non-interest-bearing demand deposits
$ 315,888
 
$ 298,662
 
$ 286,800
      Interest bearing transaction accounts 39,358   36,841   39,428
      Money market, savings and NOW deposits 277,035   282,465   274,088
      Time deposits
10,518
 
11,524
 
11,784
            Total Deposits 642,799   629,492   612,100
      Federal Home Loan Bank borrowings 44,000   30,000   24,000
      Other liabilities
3,923
 
3,501
 
4,647
            Total Liabilities 690,722   662,993   640,747
Shareholders' Equity          
      Serial Preferred Stock 16,380   16,380   16,380
      Common Stock 43,142   43,109   43,034
      Retained Earnings 9,781   8,634   4,942
       Accumulated other comprehensive income
(24)
 
221
 
1,035
            Total Shareholders' Equity
69,279
 
68,344
 
65,391
Total Liabilities and Shareholders' Equity
$ 760,001
 
$ 731,337
 
$ 706,138

1st Enterprise Bank
Condensed Statements of Operations

 
For the Years Ended
 
unaudited
 
audited
Interest Income
12/31/2013
 
12/31/2012
      Interest and fees on loans
$ 18,968
 
$ 15,355
      Interest on investment securities 3,631   4,141
      Other interest income
37
 
90
            Total interest income 22,636   19,586
Interest Expense
745
 
723
Net Interest Income 21,891   18,862
Provision for loan losses
1,322
 
1,508
Net Interest Income After Provision for Loan Losses 20,569   17,355
Non-interest Income      
      Service charges, fees and other income 3,555   3,138
      Gain/(Loss) on sale of investment sercurities
(8)
 
899
            Total non-interest expense 3,547   4,037
Non-interest Expenses      
      Compensation and benefit expenses 10,311   9,663
      Compensation and benefit expenses 1,571   1,443
      Data processing 1,061   1,007
      Professional and legal 1,390   1,269
      Other operating expenses
2,559
 
2,683
            Total non-interest expense 16,892   16,065
Income Before Income Taxes
7,224
 
5,327
Provision for income taxes
2,221
 
1,595
Net Income
$ 5,003
 
$ 3,732
Preferred dividends
164
 
164
Net Income Applicable to Common Shareholders
$ 4,839
 
$ 3,568
Earnings Per Share:      
Basic earnings per share
$ 1.28
 
$ 1.04
Diluted earnings per share
$ 1.18
 
$ 0.98
Average shares outstanding 3,794,818   3,431,886
Average fully diluted shares 4,107,967   3,622,251
Total Shares outstanding at end of period 3,823,939   3,815,089
Capital Ratios:      
Tier 1 leverage ratio 9.3 %   9.4 %
Tier 1 risk-based capital ratio 11.0 %   12.1 %
Total risk-based capital ratio 12.0 %   13.2 %
Book value per share
$ 13.83
 
$ 12.85
Performance Ratios:      
Return on average assets 0.70 %   0.60 %
Return on average common equity 9.43 %   8.17 %
Net interest margin 3.27 %   3.23 %
Cost of Funds 0.11 %   0.13 %
Efficiency ratio 66.41 %   70.16 %
Average Balances:      
Total Assets
$ 712,765
 
$ 626,527
Earning Assets 669,713   584,500
Total Loans 444,389   343,601
Total Securities 215,399   212,171
Total Deposits 621,785   560,741
Common Equity 51,334   43,677

1st Enterprise Bank
Condensed Statements of Operations

 
Three Months Ended
 
unaudited
Interest Income
12/31/2013
 
9/30/2013
 
12/31/2012
      Interest and fees on loans
$ 5,036
 
$ 4,780
 
$ 4,291
      Interest on investment securities 944   855   963
      Other interest income
8
 
11
 
23
            Total interest income 5,988   5,646   5,277
Interest Expense
189
 
180
 
174
Net Interest Income 5,799   5,466   5,103
Provision for loan losses
710
 
4
 
513
Net Interest Income After Provision for Loan Losses 5,089   5,462   4,590
Non-interest Income          
Service charges, fees and other income 1,024   904   733
Gain/(Loss) on sale of investment sercurities
0
 
(12)
 
629
      Total non-interest Income 1,024   892   1,362
Non-interest Expenses          
      Compensation and benefit expenses 2,846   2,584   2,543
      Occupancy and equipment expenses 393   399   364
      Data processing 269   268   268
      Professional and legal 382   347   318
      Other expenses
667
 
654
 
679
            Total non-interest expense 4,557   4,252   4,172
Income Before Income Taxes
1,557
 
2,103
 
1,781
Provision for income taxes
369
 
715
 
550
Net Income
$ 1,187
 
$ 1,388
 
$ 1,230
Preferred dividends
41
 
41
 
41
Net Income Applicable to Common Shareholders
$ 1,146
 
$ 1,347
 
$ 1,189
Earnings Per Share:          
Basic earnings per share
$ 0.30
 
$ 0.36
 
$ 0.31
Diluted earnings per share
$ 0.28
 
$ 0.33
 
$ 0.29
Average shares outstanding 3,798,213   3,795,218   3,791,905
Average fully diluted shares 4,149,582   4,123,964   4,039,003
Total Shares outstanding at end of period 3,823,939   3,822,389   3,815,089
Capital Ratios:          
Tier 1 leverage ratio 9.3 %   9.6 %   9.4 %
Tier 1 risk-based capital ratio 11.0 %   11.5 %   12.1 %
Total risk-based capital ratio 12.0 %   12.5 %   13.2 %
Book value per share
$ 13.83
 
$ 13.59
 
$ 12.85
Performance Ratios:          
Return on average assets 0.63 %   0.77 %   0.71 %
Return on average common equity 8.57 %   10.37 %   9.56 %
Net interest margin 3.30 %   3.23 %   3.13 %
Cost of Funds 0.11 %   0.11 %   0.11 %
Efficiency ratio 66.41 %   66.27 %   70.16 %
Average Balances:          
Total Assets
$ 742,247
 
$ 713,333
 
$ 689,361
Earning Assets 696,826   671,798   648,523
Total Loans 477,186   448,250   389,321
Total Securities 209,826   213,618   222,696
Total Deposits 656,444   623,879   617,678
Common Equity 53,091   51,540   49,473

Contact:
John C. Black
CEO
213-430-7070
Copyright 2012, 1st Enterprise Bank, Inc. All rights reserved.