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1st Enterprise Bank Announces Net Income of
$3.7 Million for 2012, an Increase of 18% Over 2011

LOS ANGELES, CA--(Marketwire - Jan 31, 2013) - 1st Enterprise Bank ("the Bank") (OTC.BB:FENB), an independent full-service commercial bank serving the Southern California business community, announced full year net income of $3.7 million for 2012, an 18% increase over 2011.

Financial Highlights

  • Net income for 2012 was $3,732,000, an 18% increase over 2011 net income of $3,152,000
  • Diluted earnings per common share were $.98 for 2012, compared to $.85 in 2011
  • Net income was $1,230,000 for the fourth quarter of 2012, a 28% increase over the fourth quarter of 2011 and a 90% increase over the third quarter of 2012
  • Diluted earnings per common share were $.29 for the fourth quarter, compared to $.32 for the fourth quarter of 2011 and $.15 for the third quarter of 2012
  • Total Assets grew by 25% in 2012, ending the year at $706 million
  • Total Loans outstanding grew by 40% in 2012, ending the year at $409 million
  • Total Deposits grew by 23% in 2012, ending the year at $612 million
  • The Bank continues to be well capitalized with a Tier 1 Leverage Ratio of 9.4% and Total Risk Based Capital Ratio of 13.2%

John Black, CEO, stated, "We are pleased to announce that 1st Enterprise Bank achieved record full year earnings of $3.7 million in 2012 and record quarterly earnings of $1.2 million in the fourth quarter. The Bank continued to generate strong growth in both loans and deposits, as loans grew by an annualized rate of 29% and deposits grew by 14%, during the fourth quarter of 2012. Net interest income continued to grow, as reflected in the 25% increase over the prior year. Excluding gain on the sale of securities, the Bank grew non-interest income by 42%. In addition to our strong financial performance during 2012, we also were successful in adding five highly experienced bankers to our team. They included two experienced commercial relationship managers that will open and lead our new San Fernando regional loan production office opening in March of this year."

Net interest income before provision was $18.9 million in 2012, a $3.9 million or 26% 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 $93 million or 19% over 2011. Net interest margin increased from 3.03% in 2011 to 3.23% in 2012, as a result of both an increase in the earning asset yield and a decrease in the Bank's cost of funds. The provision for loan loss was $1,508,000 in 2012, a $373,000 increase over 2011. Net loan charge-offs for 2012 and for the fourth quarter totaled $598,000 and non-accrual loans totaled $471,000 at December 31, 2012. "While we were disappointed to have experienced our first charge-off and non-accrual loans (all related to the same borrower), these levels are still far below industry averages, as reflected in the net charge-off ratio of 0.17% for all of 2012 and a non-performing asset ratio of 0.44% at year end," stated Mr. Black.

Non-interest income, excluding gain on sale of securities was $3.1 million in 2012, an increase of more than $900,000 or 42% over 2011. Gain on sale of securities was approximately $900,000 in 2012, a 24% decline from the $1.2 million in gains recorded in 2011.

Non-interest expense grew by $3 million over 2011 to $16 million for 2012. The majority of this growth was attributable to increased staff and benefit expense as the Bank continued to expand its staffing levels to maintain high levels of customer service and to accommodate continued growth in the coming years.

For the three months ended December 31, 2012, net interest income before provision was $5.1 million, an increase of more than $1 million or 25% compared to the fourth quarter of 2011 and an increase of more than $300,000 or 6% compared to the third quarter of 2012. 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 $649 million in the fourth quarter of 2012, a 22% increase over the prior year and a 4% increase from the prior quarter. Net interest margin was 3.13% for the fourth quarter, compared to 3.04% and 3.08% for the prior year and prior quarter, respectively. The increase in net interest margin resulted from both an increase in the earning asset yield and a decrease in the Bank's cost of funds. The provision for loan loss was $513,000 in the fourth quarter of 2012 compared to $565,000 in the fourth quarter of 2011 and $745,000 in the third quarter of 2012.

Non-interest income was $1.4 million in the fourth quarter of 2012, including gains on sale of securities of $629,000. Excluding the gains, non-interest income declined by $36,000 and $194,000 over the prior year and prior quarter, respectively. Non-interest expense in the fourth quarter of 2012 grew by more than $800,000 or 26% over 2011, but grew by only 2% over the third quarter of 2012.

Brian Horton, President, concluded, "We are very pleased with these results and the Bank's ability to successfully navigate the economic headwinds that we have faced the last five years. We want to thank our loyal staff for their efforts and our loyal customers, because they are the drivers of our success."

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
12/31/2012
 
9/30/2012
 
12/31/2011
      Cash and due from banks
$ 14,520
 
$ 21,058
 
$ 17,344
      Interest earning deposits in other banks
23,386
 
15,357
 
8,389
            Total cash and cash equivalents


37,906   36,415   25,733
      Certificates of deposit in other banks 2,490   498   5,522
      Investment securities - available-for-sale 180,491   167,518   173,155
      Investment securities - held-to-maturity 56,026   56,114   53,127
      Loans, net of deferred loan fees 408,767   381,307   292,587
      Allowance for loan losses
(5,510)
 
(5,595)
 
(4,600)
      Loans, net of allowance for loan losses 403,257   375,712   287,987
      Bank owned life insurance 13,389   13,276   10,462
      Premises and equipment, net 2,256   2,274   2,464
      Accrued interest receivable and other assets
10,323
 
10,022
 
8,611
            Total Assets


$ 706,138
 
$ 661,829
 
$ 567,061
Liabilities          
      Non-interest-bearing demand deposits
$ 286,800
 
$ 273,197
 
$ 215,355
      Interest bearing transaction accounts 39,428   43,884   37,075
      Money market and savings accounts 274,088   264,056   233,537
      Time deposits
11,784
 
10,739
 
10,976
            Total Deposits 612,100   591,876   496,943
      Federal Home Loan Bank Borrowings 24,000   -   17,000
      Other liabilities
4,647
 
4,913
 
2,881
            Total Liabilities


640,747   596,789   516,824
Shareholders' Equity          
      Serial Preferred Stock 16,380   16,380   16,380
      Common Stock 43,034   43,008   30,958
      Retained Earnings 4,942   3,752   1,374
      Accumulated other comprehensive income
1,035
 
1,900
 
1,525
            Total Shareholders' Equity
65,391
 
65,040
 
50,237
Total Liabilities and Shareholders' Equity
$ 706,138
 
$ 661,829
 
$ 567,061

1st Enterprise Bank
Condensed Statements of Operations

 
For the Years Ended
 
Unaudited
 
Audited
Interest Income
12/31/2012
 
12/31/2011
      Interest and fees on loans
$ 15,355
 
$ 11,536
      Interest on investment securities 4,141   4,423
      Other interest income
90
 
149
            Total interest income 19,586   16,108
Interest Expense
723
 
1,120
Net Interest Income 18,862   14,988
Provision for loan losses
1,508
 
1,135
Net Interest Income After Provision for Loan Losses

17,355   13,853
Non-interest Income      
Service charges, fees and other income 3,138   2,210
Gain on sale of investment sercurities
899
 
1,177
            Total non-interest Income


4,037   3,387
Non-interest Expenses      
      Compensation and benefit expenses 9,663   7,513
      Occupancy and equipment expenses 1,443   1,325
      Data processing 1,007   818
      Professional and legal 1,269   1,226
      Other operating expenses
2,683
 
2,138
            Total non-interest expense


16,065   13,020
Income Before Income Taxes
5,327
 
4,220
Provision for income taxes
1,595
 
1,067
Net Income
$ 3,732
 
$ 3,152
Preferred dividends & Warrant amortization
164
 
655
Net Income Applicable to Common Shareholders


$ 3,568
 
$ 2,497
Earnings Per Share      
Basic earnings per share
$ 1.04
 
$ 0.89
Diluted earnings per share
$ 0.98
 
$ 0.85
Average shares outstanding 3,431,886   2,818,497
Average fully diluted shares 3,622,251   2,951,985
Total Shares outstanding at end of period


3,815,089   2,848,500
Capital Ratios      
Tier 1 leverage ratio 9.4 %   8.5 %
Tier 1 risk-based capital ratio 12.1 %   12.0 %
Total risk-based capital ratio 13.2 %   13.2 %
Book value per share

$ 12.85
 
$ 11.89
Performance Ratios      
Return on average assets 0.60 %   0.59 %
Return on average common equity 8.17 %   7.62 %
Net interest margin 3.23 %   3.03 %
Cost of Funds 0.13 %   0.23 %
Efficiency ratio

70.16 %   70.86 %
Average Balances      
Total Assets
$ 626,527
 
$ 534,397
Earning Assets 584,500   491,909
Total Loans 343,601   245,632
Total Securities 212,171   229,754
Total Deposits 560,741   484,172
Common Equity 43,677   32,774

1st Enterprise Bank
Condensed Statements of Operations

 
Three Months Ended
 
unaudited
Interest Income
12/31/2012
 
9/30/2012
 
12/31/2011
      Interest and fees on loans
$ 4,291
 
$ 3,957
 
$ 3,150
      Interest on investment securities 963   987   1,136
      Other interest income
23
 
35
 
18
            Total interest income 5,277   4,979   4,304
Interest Expense
174
 
179
 
231
Net Interest Income 5,103   4,800   4,073
Provision for loan losses
513
 
745
 
565
Net Interest Income After Provision for Loan Losses

4,590   4,055   3,508
Non-interest Income          
Service charges, fees and other income 733   927   769
Gain on sale of investment sercurities
629
 
18
 
0
            Total non-interest Income


1,362   945   769
Non-interest Expenses          
      Compensation and benefit expenses 2,543   2,341   1,912
      Occupancy and equipment expenses 364   359   352
      Data processing 268   278   222
      Professional and legal 318   417   368
      Other operating expenses
679
 
683
 
451
            Total non-interest expense


4,172   4,078   3,305
Income Before Income Taxes
1,781
 
922
 
972
Provision for income taxes
550
 
273
 
11
Net Income
$ 1,230
 
$ 649
 
$ 961
Preferred dividends & Warrant amortization
41
 
41
 
41
Net Income Applicable to Common Shareholders


$ 1,189
 
$ 608
 
$ 920
Earnings Per Share          
Basic earnings per share
$ 0.31
 
$ 0.16
 
$ 0.33
Diluted earnings per share
$ 0.29
 
$ 0.15
 
$ 0.32
Average shares outstanding 3,791,905   3,790,359   2,818,500
Average fully diluted shares 4,039,003   4,002,707   2,843,250
Total Shares outstanding at end of period


3,815,089   3,814,539   2,848,500
Capital Ratios          
Tier 1 leverage ratio 9.4 %   9.6 %   8.5 %
Tier 1 risk-based capital ratio 12.1 %   12.1 %   12.0 %
Total risk-based capital ratio 13.2 %   13.3 %   13.2 %
Book value per share

$ 12.85
 
$ 12.76
 
$ 11.89
Performance Ratios          
Return on average assets 0.71 %   0.39 %   0.66 %
Return on average common equity 9.56 %   4.97 %   10.85 %
Net interest margin 3.13 %   3.08 %   3.04 %
Cost of Funds 0.11 %   0.12 %   0.18 %
Efficiency ratio

70.16 %   72.37 %   70.86 %
Average Balances          
Total Assets
$ 689,361
 
$ 660,792
 
$ 575,479
Earning Assets 648,523   620,656   531,685
Total Loans 389,321   356,425   268,464
Total Securities 222,696   210,271   242,694
Total Deposits 617,678   591,691   521,104
Common Equity 49,473   48,692   33,652

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

 

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