1st Capital Bancorp Announces First Quarter 2024 Financial Results

Published

SALINAS, Calif., April 30, 2024 (GLOBE NEWSWIRE) -- 1st Capital Bancorp (the “Company”), (OTCQX: FISB), the parent company of 1st Capital Bank (the “Bank”), today announced its unaudited financial results for the quarter ended March 31, 2024. The Company reported consolidated net income of $901 thousand, or $0.16 per diluted share, for the first quarter of 2024, compared to $677 thousand, or $0.12 per diluted share, for the preceding quarter and $0.19 per diluted share, for the first quarter of 2023.

“Our operating performance for the first quarter of 2024 reflects the team's commitment and dedication in executing our relationship banking and community focused model along the central coast," said President and Chief Executive Officer Sam Jimenez. "While our funding costs and net interest margin (NIM) continues to be affected by elevated interest rates, we are confident that the combination of continuing strong loan demand, repricing cash flows, and rate hedges will provide NIM and profitability benefits in the coming quarters."

At March 31, 2024, the Company, on a consolidated basis, had $1.0 billion in assets, $623.8 million in net loans and $885.7 million in deposits.

Financial Highlights Performance highlights for the quarter ended March 31, 2024, included the following:

  • Net income of $901 thousand for the first quarter of 2024, compared to $677 thousand in the preceding quarter and $1.06 million in the first quarter a year ago.
  • Diluted earnings per share were $0.16 for the first quarter ended March 31, 2024, as compared to $0.12 and $0.19 for the quarters ended December 31, 2023, and March 31, 2023, respectively.
  • Pretax, pre-provision income for the quarter ended March 31, 2024, totaled $2.4 million, as compared to $2.4 million and $2.1 million for the quarters ended December 31, 2023, and March 31, 2023, respectively.
  • Total assets increased to $1.0 billion at March 31, 2024, compared to $989.1 million at December 31, 2023 and $954.5 million at March 31, 2023.
  • Core loans increased $18.6 million, or 3.4%, to $559.1 million compared to $540.5 million at December 31, 2023, and increased $93.8 million, or 20.2%, compared to $465.3 million at March 31, 2023.
  • Total deposits excluding brokered deposits decreased $30.3 million, or 3.6%, compared to December 31, 2023, and are $1.7 million, or 0.2%, lower than the quarter ended March 31, 2023.
  • Return on average equity was 5.70% for the first quarter, as compared to 4.81% and 7.51% for the quarters ended December 31, 2023, and March 31, 2023, respectively.
  • Return on average assets was 0.37% for the first quarter as compared to 0.27% and 0.45% for the quarters ended December 31, 2023, and March 31, 2023, respectively.
  • Net interest margin was 3.16% for the first quarter as compared to 3.40% and 3.39% for the quarters ended December 31, 2023, and March 31, 2023, respectively.
  • The Company’s efficiency ratio was 70.43% for the first quarter, as compared to 72.71% and 74.38% for the quarters ended December 31, 2023, and March 31, 2023, respectively.
  • The Company recorded provision for credit loss expense of $1.20 million for the first quarter compared to $1.47 million and $690 thousand for the quarters ended December 31, 2023, and March 31, 2023, respectively.
  • As of March 31, 2024, the Company’s nonperforming assets to total assets was 0.09%, as compared to 0.18% and 0.16% for December 31, 2023, and March 31, 2023, respectively.
  • Federal regulatory capital ratios for the quarters ended March 31, 2024, December 31, 2023, and March 31, 2023, exceed well capitalized thresholds.
  • At March 31, 2024, the Company has $389.4 million in available liquidity from secured and unsecured borrowing lines, which represents 38.4% of total assets.

Net Interest Income and Net Interest MarginThe Company's first quarter 2024 net interest income decreased $0.7 million, or 9.0%, to $7.7 million as compared with $8.4 million for the quarter ended December 31, 2023, and $7.9 million for the quarter ended March 31, 2023, as funding costs rose more than earning asset yields.

Loan interest income increased $112 thousand, or 1.4%, to $8.2 million for the quarter ended March 31, 2024, compared to $8.1 million for the quarter ended December 31, 2023, and increased $1.5 million, or 21.7%, to $6.7 million compared to the quarter ended March 31, 2023. Interest income on investment securities was $1.9 million for the quarter ended March 31, 2024, compared to $1.9 million for the quarter ended December 31, 2023. Interest income on interest-bearing deposits decreased $178 thousand, or 23.1%, to $591 thousand for the quarter ended March 31, 2024, compared to $769 thousand for the quarter ended December 31, 2023, due to lower average cash balances.

Interest expense increased $698 thousand, or 28.9%, to $3.1 million for the quarter ended March 31, 2024, compared to $2.4 million for the quarter ended December 31, 2023, due to higher utilization of wholesale borrowings and brokered CDs in the quarter. Interest expense for each of the quarters presented also includes $169 thousand related to subordinated debt.

The Company's net interest margin decreased 25 basis points to 3.16% for the quarter ended March 31, 2024, from 3.40% when compared to the quarter ended December 31, 2023. The Company’s loan yields increased 8 basis points to 5.32% for the quarter ended March 31, 2024, compared to 5.24% for the quarter ended December 31, 2023, and 4.77% in the first quarter a year ago. The Company’s cost of funds increased 33 basis points to 1.37% for the quarter ended March 31, 2024, compared to 1.04% for the quarter ended December 31, 2023, and 0.55% in the first quarter a year ago. The increase in cost of funds is driven by an increase in average balances of higher cost FHLB advances and brokered deposits.

Noninterest ExpensesThe Company's total non-interest expense decreased $0.7 million, or 11.4%, to $5.6 million in the quarter ended March 31, 2024, compared to $6.3 million and $6.0 million for the quarters ended December 31, 2023, and March 31, 2023, respectively. The decrease was primarily related to elevated costs experienced in the fourth quarter 2023 associated with severance costs related to the retirement of an executive and decreased expenses relating to technology services.

Balance Sheet SummaryTotal assets increased $25.5 million, or 2.6%, to $1.0 billion at March 31, 2024, compared to $989.1 million at December 31, 2023, and $954.5 million at March 31, 2023. Cash and due from banks increased $15.0 million, or 38.9%, to $53.5 million at March 31, 2024, compared to $38.5 million at December 31, 2023, and $45.6 million at March 31, 2023. The investment portfolio increased minimally to $291.8 million in the first quarter of 2024 from a balance of $291.2 million at December 31, 2023, and $299.7 million at March 31, 2023. At March 31, 2024 and December 31, 2023, $69.5 million and $70.1 million, respectively, of the investment portfolio were classified as held-to-maturity. As of March 31, 2024, investments classified as held-to-maturity comprise approximately 24% of the portfolio.

Total loans outstanding increased $10.1 million, or 1.6%, to $630.9 million as of March 31, 2024, compared to $620.8 million as of December 31, 2023, and $572.8 million at March 31, 2023. Growth in the core loan portfolio of $18.6 million, or 3.4%, to $559.1 million at March 31, 2024, was offset by a decrease of $8.5 million, or 10.6%, to $71.8 million in wholesale lease and consumer pools.

Loan type (dollars in thousands)03/31/2024% of TotalLoans 12/31/2023% of TotalLoans 03/31/2023% of TotalLoans
         
Construction and land (including farmland)$32,644 5.2% $32,701 5.3% $21,605 3.8%
Residential 1 to 4 units 68,879 10.9%  67,680 10.9%  60,754 10.6%
Home equity lines of credit 4,400 0.7%  3,855 0.6%  4,214 0.7%
Multifamily 92,178 14.6%  91,065 14.7%  78,103 13.6%
Owner occupied commercial real estate 137,172 21.7%  128,520 20.7%  112,600 19.7%
Non owner-commercial real estate 206,365 32.7%  198,410 32.0%  188,220 32.9%
Commercial and industrial 54,172 8.6%  55,549 8.9%  44,402 7.7%
Consumer 10,769 1.7%  13,382 2.2%  22,414 3.9%
Leases and Other Loans 24,330 3.9%  29,656 4.7%  40,498 7.1%
Total loans 630,909 100.00%  620,818 100.00%  572,810 100.0%
Allowance for credit losses (7,101)   (7,119)   (7,374) 
Net loans held for investment$623,808   $613,699   $565,436  

Total deposits were $885.7 million at March 31, 2024 representing a $5.3 million decrease compared to total deposits of $890.9 million at December 31, 2023. The decrease in deposits is primarily related to a large deposit relationship who moved some excess operating funds into the market seeking higher returns. The Company’s relationship with the long-standing depositor remains strong. The decrease was partially offset by an increase in the use of brokered deposits. Noninterest-bearing balances comprised 42.3% of total deposits at March 31, 2024.

Deposit type (dollars in thousands)03/31/2024% of TotalDeposits 12/31/2023% of TotalDeposits 03/31/2023% of TotalDeposits
Interest- bearing checking accounts$61,797 7.0% $48,006 5.4% $51,631 6.3%
Money market 229,381 25.9%  227,482 25.5%  233,666 28.6%
Savings 106,731 12.1%  98,395 11.0%  126,513 15.5%
Time 112,829 12.7%  89,901 10.1%  15,937 1.9%
Total interest-bearing deposits 510,738 57.7%  463,784 52.0%  427,747 52.3%
Noninterest-bearing 374,944 42.3%  427,150 48.0%  389,623 47.7%
Total deposits$885,682 100.0% $890,934 100.0% $817,370 100.0%

Other borrowings totaled $40.0 million at March 31, 2024, compared to $10.0 million at December 31, 2023, and $55 million at March 31, 2023. Subordinated debt balances totaled $14.8 million at March 31, 2024, December 31, 2023, and March 31, 2023, respectively.

Shareholder’s equity totaled $65.2 million at March 31, 2024, compared to $62.4 million at December 31, 2023, an increase of $2.8 million, or 4.5%.

Allowance for Credit Losses and Asset QualityProvision expense of $1.2 million was recorded in the quarter ended March 31, 2024, compared to $1.5 million in the quarter ended December 31, 2023, and $690 thousand in the first quarter a year ago. The provision expense continues to be driven by charge offs within the wholesale loan pool portfolio and overall loan growth.

The allowance for credit losses was 1.13% of outstanding loans at March 31, 2024, compared to 1.15% of outstanding loans at December 31, 2023 and 1.29% at March 31, 2023. Nonperforming assets were 0.09% of the Company’s total assets at March 31, 2024, compared with 0.18% at December 31, 2023, and 0.16% at March 31, 2023. The Company had $442 thousand in nonaccrual loans at March 31, 2024, representing 0.07% of total loans. The Company recorded net charge-offs of $1.2 million in the quarter ended March 31, 2024, compared to $1.3 million in the quarter ended December 31, 2023, and $789 thousand in the first quarter a year ago. Charge-offs for the quarters ended March 31, 2024, and December 31, 2023, were all within the purchased lease and consumer pools.

Asset Quality (dollars in thousands) 03/31/2024  12/31/2023   03/31/2023 
Loans past due 90 days or more and accruing interest$434 $1,669 $891 
Other nonaccrual loans 442  116  665 
Other real estate owned --  --  -- 
Total nonperforming assets$ 876  $ 1,784  $ 1,556  
    
Allowance for credit losses to total loans 1.13% 1.15% 1.29%
Allowance for credit losses to nonperforming loans 810.62% 399.05% 474.01%
Nonaccrual loans to total loans 0.07% 0.02% 0.12%
Nonperforming assets to total assets 0.09% 0.18% 0.16%
Net charge-offs to average total loans 0.79% 0.82% 0.56%

  
1ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA – UNAUDITED
($ in 000s, except per share data)
  
Assets 03/31/202412/31/202303/31/2023
Cash and due from banks $53,480 $38,510 $45,567 
Investment securities available-for-sale  222,272  221,136  228,711 
Investment securities held-to-maturity  69,549  70,081  70,977 
Loans and leases held for investment  630,909  620,818  572,810 
Allowance for credit losses  (7,101) (7,119) (7,374)
Net loans and leases held for investment  623,808  613,699  565,436 
Other Assets  45,423  45,635  43,829 
Total assets $1,014,532 $989,061 $954,520 
     
Liabilities and Shareholders' Equity    
Deposits:    
Non-interest-bearing $374,944 $427,150 $389,623 
Interest-bearing  510,738  463,784  427,747 
Total deposits  885,682  890,934  817,370 
Subordinated debentures  14,833  14,814  14,757 
Other borrowings  40,000  10,000  55,000 
Other liabilities  8,827  10,925  9,044 
Shareholders' equity  65,190  62,388  58,349 
Total liabilities and shareholders' equity $1,014,532 $989,061 $954,520 
     
Shares outstanding  5,596,543  5,568,746  5,509,429 
Earnings per share basic $0.16 $0.12 $0.19 
Earnings per share diluted $0.16 $0.12 $0.19 
Nominal and tangible book value per share $11.65 $11.20 $10.59 

 
1ST CAPITAL BANCORP
CONDENSED FINANCIAL DATA – UNAUDITED
($ in 000s)
 Three Months Ended
Operating Results Data03/31/202412/31/202303/31/2023
Interest and dividend income   
Loans$8,176 $8,064 $6,718 
Investment securities 1,913  1,916  1,944 
Federal Home Loan Bank stock 101  95  70 
Interest-bearing deposits 591  769  311 
Total interest and dividend income 10,781  10,844  9,043 
Interest expense 3,114  2,416  1,188 
Net interest income 7,667  8,428  7,855 
Provision for credit losses 1,199  1,465  690 
Net interest income after provision for credit losses 6,468  6,963  7,165 
Noninterest income 323  303  373 
Net gain (loss) on sales/calls of investment securities --  --  (134)
Noninterest expenses   
Salaries and benefits expense 3,486  4,044  3,747 
Occupancy expense 461  483  414 
Data and item processing 20  296  308 
Furniture and equipment 90  103  117 
Professional services 249  143  268 
Other 1,321  1,279  1,167 
Total noninterest expenses 5,627  6,348  6,021 
Income before provision for income taxes 1,164  918  1,383 
Provision for income taxes 263  241  325 
Net income$901 $677 $1,058 

 Three Months Ended
Selected Average Balances03/31/202412/31/202303/31/2023
Gross loans$617,976 $610,034 $571,144 
Investment securities 325,906  328,862  303,034 
Federal Home Loan Bank stock 4,381  4,381  4,058 
Other interest earning assets 39,803  49,663  34,996 
Total interest earning assets 988,066  992,940  913,232 
Total assets 989,254  987,101  947,453 
Interest-bearing checking accounts 51,223  49,002  66,480 
Money market 233,988  278,125  238,012 
Savings 99,401  110,251  138,031 
Time deposits 84,808  43,707  10,897 
Total interest- bearing deposits 469,420  481,085  453,420 
Noninterest bearing demand deposits 378,834  400,941  405,436 
Total deposits 848,254  882,026  858,856 
Subordinated debentures and other borrowings 67,184  39,259  21,261 
Shareholders' equity$63,558 $55,866 $57,148 
    
 
 
1ST CAPITAL BANCORPCONDENSED FINANCIAL DATA – UNAUDITED($ in 000s)
 Three Months Ended
Selected Financial Ratios03/31/202412/31/202303/31/2023
Return on average total assets 0.37% 0.27% 0.45%
Return on average shareholders' equity 5.70% 4.81% 7.51%
Net interest margin 3.16% 3.40% 3.39%
Net interest income to average total assets 3.12% 3.39% 3.36%
Efficiency ratio 70.43% 72.71% 74.38%

Regulatory Capital and Ratios03/31/202412/31/202303/31/2023
Common equity tier 1 capital$106,894 $104,620 $102,724 
Tier 1 regulatory capital$106,894 $104,620 $102,724 
Total regulatory capital$114,192 $111,935 $110,295 
Tier 1 leverage ratio 10.44% 10.13% 10.45%
Common equity tier 1 risk-based capital ratio 14.80% 14.66% 15.32%
Tier 1 capital ratio 14.80% 14.66% 15.32%
Total risk-based capital ratio 15.81% 15.68% 16.45%

About 1st Capital Bancorp

1st Capital Bancorp is the holding company for 1st Capital Bank. The Bank’s primary target markets are commercial enterprises, professionals, real estate investors, family business entities, and residents along the Central Coast region of California. The Bank provides a wide range of credit products, including loans under various government programs such as those provided through the U.S. Small Business Administration and the U.S. Department of Agriculture. A full suite of deposit accounts also is furnished, complemented by robust cash management services. The Bank operates full-service branch offices in Monterey, Salinas, King City, San Luis Obispo and Santa Cruz. The Bank’s corporate offices are located at 150 Main Street, Suite 150, Salinas, California 93901. The Bank’s website is www.1stCapital.bank. The main telephone number is 831.264.4000. Member FDIC / Equal Opportunity Lender / SBA Preferred Lender

Forward-Looking StatementsCertain of the statements contained herein that are not historical facts are “forward-looking statements” within the meaning of and subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may contain words or phrases including, but not limited, to: “believe,” “expect,” “anticipate,” “intend,” “estimate,” “target,” “plans,” “may increase,” “may fluctuate,” “may result in,” “are projected,” and variations of those words and similar expressions. All such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause such a difference include, among other matters, changes in interest rates; economic conditions including inflation and real estate values in California and the Bank’s market areas; governmental regulation and legislation; credit quality; competition affecting the Bank’s businesses generally; the risk of natural disasters and future catastrophic events including pandemics, terrorist related incidents and other factors beyond the Bank’s control; and other factors. The Bank does not undertake, and specifically disclaims any obligation, to update or revise any forward-looking statements, whether to reflect new information, future events, or otherwise, except as required by law.

This news release is available at the www.1stCapital.bank internet site for no charge.

For further information, please contact:

Joel Keller Samuel D. Jimenez
EVP / Chief Financial Officer President & Chief Executive Officer
831.264.4014 office 831.264.4057 office
Joel.Keller@1stCapitalBank.com Sam.Jimenez@1stCapitalBank.com
Source: 1st Capital Bank

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