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1st Enterprise Bank Announces Record Net Income of
$1.4 Million for the 2nd Quarter of 2013

LOS ANGELES, CA -- (Marketwired) -- 07/17/13 -- 1st Enterprise Bank ("the Bank")(OTC.BB:FENB), an independent full-service commercial bank serving the Southern California business community, reported net income of $1,410,000 for the quarter ending June 30, 2013.

Financial Highlights

  • Total Assets grew by 16%, from $619 million at June 30, 2012 to $716 million at June 30, 2013
  • Total Loans outstanding grew by $104 million or 30%, from $341 million at June 30, 2012 to $445 million at June 30, 2013
  • Total Deposits grew by 9%, from $551 million at June 30, 2012 to $600 million at June 30, 2013
  • Net interest income of $5.4 million was the highest in the Bank's history and 17% higher than the second quarter of 2012
  • Income before taxes, loan loss provision and gain on sale of securities was $2.18 million for the quarter, a 10% increase over the prior quarter and a 73% increase over the prior year
  • Net Income applicable to common shareholders was $1,369,000 for the second quarter of 2013, compared to $976,000 for the first quarter of 2013 and $763,000 for the second quarter of 2012
  • Diluted earnings per common share was $.34 for the quarter, compared to $.24 in the first quarter of 2013 and $.22 in the second quarter of 2012

"Our second quarter results reflect the Bank's continued focus on a balance between growth and earnings," said John Black, CEO. "Further, our steady growth in quarterly net income to its current all time high reflects the operating efficiencies we are just now beginning to achieve." Brian Horton, President added, "We are very pleased to have made some very strategic hires in the second quarter and we continue to search out experienced bankers to add to our very talented team."

For the three months ended June 30, 2013, net interest income before provision was $5.4 million, an increase of 17% compared to the second quarter of 2012 and an increase of 4% compared to the first quarter of 2013. The year-over-year growth in net interest income was the result of growth in earning assets offsetting a modest decline in net interest margin. Earning assets were $656 million in the second quarter of 2013, a 19% or $106 million increase over the prior year. The net interest margin was 3.32% during the second quarter of 2013, compared to 3.38% for the prior year. The decrease in net interest margin was the result of declining loan and investment yields due to the continuation of the current low rate environment. The growth in net interest income over the prior quarter was the result of an increase in the net interest margin from 3.23% to 3.32%. This increase resulted from the yield on earning assets increasing from the prior quarter as loan balances grew from 63% of earning assets, to 66%. The provision for loan loss was $66,000 for the second quarter of 2013, a $174,000 decrease year over year and a $476,000 sequential decrease. The Bank had net recoveries of $21,000 during the second quarter of 2013, compared to net loan charge-offs of $349,000 during the first quarter of 2013 and zero charge-offs in the prior year. As of June 30, 2013 there were no non-accrual loans.

Non-interest income, excluding gain on sale, was $877,000 for the quarter, which was a 12% increase year over year and a 17% sequential increase. Growth in non-interest income was generally due to increased deposit related fees.

Non-interest expense decreased by $20,000 over the prior year and increased by $157,000 or 4% over the prior quarter.

"We are extremely pleased with these results for the second quarter and first half of the year, but remain focused on meeting the challenges presented by the continued low interest rate environment and the intense competition for quality small to mid-sized business relationships," added Mr. Black.

About 1st Enterprise Bank

Founded in 2006, 1st Enterprise Bank is a full service independent 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 and an LPO in Woodland Hills, 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
6/30/2013
 
3/31/2013
 
6/30/2012
      Cash and due from banks
$ 16,786
 
$ 16,393
 
$ 3,379
      Interest earning deposits in other banks
12,036
 
14,560
 
51,817
            Total cash and cash equivalents


28,822   30,953   55,196
      Certificates of deposit in other banks 2,490   2,490   498
      Investment securities - available-for-sale 154,689   164,580   144,605
      Investment securities - held-to-maturity 61,931   55,753   57,067
      Loans, net of deferred loan fees 444,861   425,009   340,929
      Allowance for loan losses
(5,790)
 
(5,703)
 
(4,850)
      Loans, net of allowance for loan losses 439,071   419,306   336,079
      Bank owned life insurance 16,148   16,017   13,161
      Premises and equipment, net 2,647   2,700   2,407
      Accrued interest receivable and other assets
10,313
 
9,985
 
10,063
            Total Assets


$ 716,111
 
$ 701,784
 
$ 619,076
Liabilities          
      Non-interest-bearing demand deposits
$ 274,167
 
$ 268,584
 
$ 258,114
      Interest bearing transaction accounts 38,076   35,250   37,541
      Money market and savings accounts 271,377   278,610   233,736
      Time deposits
16,879
 
18,996
 
21,565
            Total Deposits 600,499   601,440   550,956
      Federal Home Loan Bank Borrowings 45,000   30,500   0
      Other liabilities
3,384
 
3,484
 
4,085
            Total Liabilities


648,883   635,424   555,041
Shareholders' Equity          
      Serial Preferred Stock 16,380   16,380   16,380
      Common Stock 43,068   43,048   42,982
      Retained Earnings 7,287   5,918   3,144
      Accumulated other comprehensive income
494
 
1,014
 
1,529
            Total Shareholders' Equity
67,228
 
66,360
 
64,035
Total Liabilities and Shareholders' Equity
$ 716,111
 
$ 701,784
 
$ 619,076

1st Enterprise Bank
Condensed Statements of Operations

 
Three Months Ended
 
unaudited
Interest Income
6/30/2013
 
3/31/2013
 
6/30/2012
      Interest and fees on loans
$ 4,724
 
$ 4,428
 
$ 3,677
      Interest on investment securities 879   952   1,104
      Other interest income
7
 
10
 
17
            Total interest income 5,610   5,390   4,798
Interest Expense
183
 
192
 
175
Net Interest Income 5,427   5,198   4,623
Provision for loan losses
66
 
542
 
240
Net Interest Income After Provision for Loan Losses

5,361   4,656   4,383
Non-interest Income          
Service charges, fees and other income 877   749   781
Gain on sale of investment sercurities
4
 
0
 
116
            Total non-interest Income


881   749   897
Non-interest Expenses          
      Compensation and benefit expenses 2,450   2,431   2,562
      Occupancy and equipment expenses 405   374   361
      Data processing 268   256   247
      Professional and legal 334   328   240
      Other operating expenses
664
 
575
 
731
            Total non-interest expense


4,121   3,964   4,141
Income Before Income Taxes
2,122
 
1,442
 
1,139
Provision for income taxes
712
 
425
 
335
Net Income
$ 1,410
 
$ 1,017
 
$ 804
Preferred dividends & Warrant amortization
41
 
41
 
41
Net Income Applicable to Common Shareholders


$ 1,369
 
$ 976
 
$ 763
Earnings Per Share          
Basic earnings per share
$ 0.36
 
$ 0.26
 
$ 0.23
Diluted earnings per share
$ 0.34
 
$ 0.24
 
$ 0.22
Average shares outstanding 3,793,339   3,793,150   3,315,021
Average fully diluted shares 4,082,229   4,062,894   3,505,846
Total Shares outstanding at end of period


3,815,589   3,815,089   3,805,039
Capital Ratios          
Tier 1 leverage ratio 9.6 %   9.4 %   10.6 %
Tier 1 risk-based capital ratio 11.8 %   11.9 %   13.4 %
Total risk-based capital ratio 12.9 %   13.0 %   14.5 %
Book value per share

$ 13.33
 
$ 13.10
 
$ 12.52
Performance Ratios          
Return on average assets 0.81 %   0.59 %   0.54 %
Return on average common equity 10.51 %   7.95 %   7.29 %
Net interest margin 3.32 %   3.23 %   3.38 %
Cost of Funds 0.12 %   0.12 %   0.12 %
Efficiency ratio

66.00 %   66.70 %   73.12 %
Average Balances          
Total Assets
$ 699,387
 
$ 695,576
 
$ 593,877
Earning Assets 655,884   653,274   550,050
Total Loans 435,824   415,003   325,867
Total Securities 215,564   230,343   200,677
Total Deposits 603,104   606,208   531,125
Common Equity 52,230   49,812   42,078

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

 

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