EX-99.1 2 v16936exv99w1.htm EXHIBIT 99.1 exv99w1
 

EXHIBIT 99.1
(FCB BANCORP LOGO)
FCB BANCORP
FCB BANCORP COMPLETES RECORD YEAR
Camarillo, California – February 2, 2005 – FCB Bancorp (OTCBB: FCBA; formerly First California Bank – OTCBB: FCAA) announced today record results for 2005, posting earnings of $3.2 million which surpassed last year’s earnings by 32 percent. A year ago net income was $2.4 million. Total assets stood at $467 million at year end, up 65 percent from the end of last year. Loans rose to $343 million and deposits climbed to $372 million.
“2005 has been a tremendous year of accomplishments on many levels for the Bank,” stated C. G. Kum, President and Chief Executive Officer. “Most significantly was the finalization of our acquisition of South Coast Commercial Bank in Orange County. With this acquisition having been completed, we have now grown to a size that will allow us to position ourselves for additional future growth. Evidence of how successful this transaction has been to the Bank is reflected in our financial report. Our total assets for 2005 increased by 65%, our loan portfolio increased by 87% and our deposits increased by 64%. The acquisition has also provided us with a tremendous opportunity to expand our presence in the very vibrant and growing Orange County market. As we continue to build upon our strategic business plan, we look forward to the challenges that will present themselves in 2006.”

 

 

Overview
FCB Bancorp (referred to as “the Company”, “us”, “we”, “our”) is a new bank holding company formed by the shareholders of First California Bank (the “Bank”). First California Bank shareholders exchanged their common shares for those of the Company on a share-for-share basis. As a result of that transaction, First California Bank became a wholly-owned subsidiary of the Company on September 30, 2005. The Company and the Bank are related entities; accordingly, our consolidated financial information for 2005 and all prior periods have been restated to reflect the combined entities.
Also on September 30, 2005, we completed the acquisition of South Coast Bancorp, Inc. and its wholly owned subsidiary, South Coast Commercial Bank, for cash consideration of $36 million. In connection with this acquisition, we issued 1,115,000 shares of new common stock to accredited investors at $19.75 per share. Net proceeds from this offering were $20.7 million. Additionally, we issued $10.3 million of junior subordinated debentures [commonly referred to as “trust preferred securities”]. Substantially all of the proceeds from these issuances were used to fund the acquisition and pay expenses incurred with both the holding company formation and the acquisition. The acquisition was accounted for using the purchase method of accounting and, as a result, our balance sheet information includes the fair value of the assets acquired and the liabilities assumed from South Coast Bancorp, Inc. as of the acquisition date. Our income statement information includes the results of South Coast Bancorp, Inc. since September 30, 2005.
On December 5, 2005, we caused First California Bank to acquire essentially all the assets and liabilities of South Coast Commercial Bank, including all current loan and deposit customers. As a result of that transaction, we now do business with all customers as First California Bank in all of our locations. In a subsequent but related transaction, we sold South Coast Commercial Bank to another institution for a premium of $1 million before taxes and expenses. The net premium reduced the previously recognized goodwill that arose from the acquisition on September 30, 2005.

 

 

Net income
                                 
    Fourth quarter     Year ended Dec 31,  
(in thousands, except per share)   2005     2004     2005     2004  
Net income
   $ 1,256     $ 672     $ 3,224     $ 2,435  
 
                                
Basic earnings per share
   $ 0.38     $ 0.31     $ 1.31     $ 1.17  
Diluted earnings per share
   $ 0.38     $ 0.31     $ 1.30     $ 1.14  
 
                                
Basic weighted average shares
     3,278       2,163       2,467       2,080  
Diluted weighted average shares
     3,294       2,184       2,488       2,136  
Net income for 2005 was $3,224,000 or $1.30 per diluted share compared with $2,435,000 or $1.14 per diluted share 2004. For the fourth quarter of 2005, net income was $1,256,000 or $0.38 per diluted share compared with $672,000 or $0.31 per diluted share for the same period last year. The earnings per share data for 2005 reflect the increase in outstanding weighted average shares that resulted from the issuance of 1,115,000 new shares at the end of the third quarter of 2005. Total common shares outstanding at December 31, 2005 were 3,277,807.
Net interest income
                                 
    Fourth quarter     Year ended Dec 31,  
(dollars in thousands)   2005     2004     2005     2004  
Net interest income
   $ 5,209     $ 2,937     $ 15,237     $ 11,656  
Net interest margin (tax equivalent)
     5.02 %     4.64 %     5.00 %     4.68 %
Average interest earning assets
   $ 415,744     $ —     $ 307,376     $ 247,283  
Average interest bearing funds
   $ 316,470     $ —     $ 208,997     $ 163,387  
Net interest income for 2005 was $15.2 million, an increase of 31 percent from $11.7 million posted last year. The net interest margin on a tax equivalent basis for 2005 was 5.00 percent up from 4.68 percent a year ago. For the fourth quarter, the net interest margin was 5.02 percent, down from 5.15 percent from the third quarter of 2005. The decline reflects the effects of the September 30, 2005 business combination – the addition of $10.3 million, 6.145 percent junior subordinated debentures and the addition of approximately $100 million of time deposits to our deposit base.

 

 

Noninterest income and noninterest expense
                                 
    Fourth quarter     Year ended Dec 31,  
(dollars in thousands)   2005     2004     2005     2004  
Service charges, fees & other income
   $ 437     $ 414     $ 1,649     $ 1,611  
Loan commissions & sales
     107       47       344       219  
Gains(losses) on sales of securities
     —       70       2       94  
       
Noninterest income
   $ 544     $ 531     $ 1,995     $ 1,924  
       
* * *
                                
Salaries and employee benefits
   $ 2,153     $ 1,300     $ 6,693     $ 5,373  
Premises and equipment
     612       375       1,832       1,301  
Other expenses
     846       647       3,028       2,735  
       
Noninterest expense
   $ 3,611     $ 2,322     $ 11,553     $ 9,409  
       
Efficiency ratio
     62.46 %     68.33 %     66.96 %     69.76 %
Service charges, fees and other income for 2005 totaled $1,649,000 compared with $1,611,000 for 2004. Loan commissions and sales were $344,000 for 2005 and $219,000 for 2004. Excluding securities transactions, noninterest income was up 9 percent for the year on higher levels of loan commissions and sales.
Operating expenses for 2005 were $11.6 million up from $9.4 million for 2004. The increase in operating expenses from a year ago reflects principally the growth in our business. We expanded our Westlake Village office and moved into a new operations center in the fourth quarter of 2004. We also opened a new branch in Simi Valley in January 2005 in a temporary location, built a new branch office on the site of the new Simi Valley Towne Center, and relocated to that location in December 2005. And, on September 30, 2005, we expanded our business through the previously described acquisition, increasing personnel and locations in Orange and Los Angeles counties. We have since that date converted to a single operating system, combined all administrative functions and now do business with all customers as First California Bank in all of our locations. Notwithstanding the increase in operating expenses, the efficiency ratio improved to 66.96 percent for 2005 from 69.76 percent a year ago. For the fourth quarter of 2005, the efficiency ratio was 62.46 percent compared to 68.33 percent for the fourth quarter of 2004. The improvement reflects higher net interest revenue from the growth of our loan portfolio and the general increase in interest rates as well as our ability to generate low-cost core deposits from our expanding branch network.

 

 

Loans and deposits
                                     
    As of Dec 31,       As of Dec 31,
(dollars in thousands)   2005   2004       2005   2004
Commercial mortgage
  $ 192,263     $ 84,914     Checking   $ 112,597     $ 84,698  
Multifamliy mortgage
    31,708       5,142     Interest checking     23,691       21,424  
Construction loans
    28,157       12,330     Savings     22,129       14,639  
Commercial loans
    64,271       61,899     Money market     57,144       52,900  
Home equity loans/lines
    8,689       2,113     Time deposits under $100,000     82,770       21,276  
 
                         
Home mortgage
    13,443       12,057     Core deposits     298,331       194,937  
Installment and credit card
    4,352       4,418     Time deposits $100,000 or more     74,017       32,251  
 
               
Total loans
  $ 342,883     $ 182,873     Total deposits   $ 372,348     $ 227,188  
 
               
Loans and deposits at December 31, 2005 include the combined balances of FCB Bancorp and South Coast Bancorp, Inc. while those at December 31, 2004 do not. Loans ended the year at $342.9 million, up from $182.9 million at the end of the 2004. Deposits ended 2005 at $372.3 million, up from $227.2 at December 31, 2004. Since the end of the third quarter of 2005, the date of the acquisition, our loans have increased 5 percent and our core deposits have increased 4 percent.
Allowance for loan losses and asset quality
                                 
    Fourth quarter     Year ended Dec 31,  
(dollars in thousands)   2005     2004     2005     2004  
Beginning balance
   $ 3,995     $ 2,565     $ 2,346     $ 2,325  
Balance acquired in purchase
                     1,184          
Provision for loan losses
     122       104       488       418  
Loans charged-off
             (273 )     (74 )     (359 )
Transfer to undisbursed commitment liability
     (50 )     (50 )     (50 )     (50 )
Recoveries on loans charged-off
     38       —       210       12  
 
      
Ending balance
   $ 4,105     $ 2,346     $ 4,105     $ 2,346  
 
      
* * *
                                
Allowance to loans
     1.20 %     1.28 %                
* * *
                                
Accruing loans past due 90 days or more
   $ 137     $ 392                  
Nonaccrual loans
   $ —     $ 2,376                  
 
                                
Nonaccrual loans to loans
     —       1.37 %                
At December 31, 2005 the allowance for loan losses was $4.1 million and the ratio of the allowance to loans was 1.20 percent. For 2005, there were net loan recoveries of $136,000 compared to net loan charge-offs of $347,000 a year ago. There were no nonaccrual loans at December 31, 2005.
Capital and selected ratios
The ratio of shareholders’ equity to total assets at December 31, 2005, which reflects the effects of the acquisition, was 9.86 percent compared with 7.95 percent at the end of the

 

 

prior year. Tangible equity to tangible assets at December 31, 2005 was 6.47 percent compared with 7.95 percent a year ago. Book value per common share at December 31, 2005 increased to $14.06 from $10.42 at December 31, 2004. The return on average assets and the return on average common equity for 2005 were 0.96 percent and 11.04 percent, respectively. The risk-based capital ratios of our bank subsidiary exceeded those required for “well-capitalized” status.
Pro forma financial information
The following pro forma combined income statement information has been presented as if the merger, common stock issuance and trust preferred issuance had occurred at the beginning of 2004. The pro forma income statement information include estimates and assumptions that were made solely for purposes of developing this pro forma information and are not necessarily an indication of the results that would have been achieved had the merger been consummated at the beginning of 2004 or that may be achieved in the future.
                 
(in thousands, except per share)   2005     2004  
Net income as reported
   $ 3,224     $ 2,435  
Pro forma combined net income
   $ 4,354     $ 3,894  
 
                
Earnings per share as reported:
                
Basic
   $ 1.31     $ 1.17  
Diluted
   $ 1.30     $ 1.14  
 
                
Pro forma combined earnings per share:
                
Basic
   $ 1.33     $ 1.22  
Diluted
   $ 1.32     $ 1.20  
 
                
Average shares outstanding as reported:
                
Basic
     2,467       2,080  
Diluted
     2,488       2,136  
 
                
Pro forma average shares outstanding:
                
Basic
     3,278       3,195  
Diluted
     3,299       3,251  

 

 

FCB Bancorp
FCB Bancorp, and its wholly owned subsidiary, First California Bank, is a leading community banking company with headquarters in Ventura County.
Established in 1979, First California Bank has eight full service offices located in Anaheim Hills, Camarillo, Irvine, Oxnard, Simi Valley, Thousands Oaks, Ventura and Westlake Village along with a loan production office located in Torrance.
Contact information
     
C. G. Kum
President and Chief Executive Officer
805-322-9308
cgkum@fcbank.com
  Romolo Santarosa
Executive Vice President and Chief Financial Officer
805-322-9333
rsantarosa@fcbank.com
*          *          *          *          *          *          *          *          *          *          *
This news release includes ‘forward-looking’ statements within the meaning of Section 27A of the Securities Act. All of the statements contained in this press release, other than statements of historical fact, should be considered forward-looking statements, including, but not limited to, those concerning (i) the Company’s strategies, objectives and plans for expansion of its operations, products and services, and growth of its portfolio of loans, deposits and investments, (ii) the Company’s beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of the Company, (iii) the Company’s beliefs as to the adequacy of the allowance for loan losses, and (iv) the Company’s beliefs and expectations of future operating results. Although the Company believes the expectations reflected in those forward-looking statements are reasonable, it can give no assurance that those expectations will prove to have been correct. All subsequent written and oral forward-looking statements by or attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this qualification. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are not intended to give any assurance as to future results. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
#               #               #
Selected financial data attached

 

 

FCB Bancorp
Selected Consolidated Financial Data
(in thousands, except per share data)
                                         
    4Qtr 2005     3Qtr 2005     2Qtr 2005     1Qtr 2005     4Qtr 2004  
Income statement summary
                                        
Net interest income
   $ 5,209     $ 3,567     $ 3,359     $ 3,102     $ 2,937  
Service charges, fees & other income
     437       439       359       414       414  
Loan commissions & sales
     107       69       66       102       47  
Gains on sales of securities
     —       —       2       —       70  
Operating expenses
     3,611       2,727       2,650       2,565       2,322  
Provision for loan losses
     122       122       122       122       104  
 
                              
Income before income tax
     2,020       1,226       1,014       931       1,042  
Income tax
     764       464       385       354       370  
 
                              
Net income
   $ 1,256     $ 762     $ 629     $ 577     $ 672  
 
                              
 
                                        
Balance sheet summary
                                        
Loans
   $ 342,883     $ 326,151     $ 199,631     $ 185,778     $ 182,873  
Allowance for loan losses
     4,105       3,995       2,593       2,537       2,346  
Securities
     73,968       77,171       73,934       75,005       77,345  
Deposits
     372,348       361,188       238,468       231,882       227,188  
Federal Home Loan Bank advances
     36,319       47,566       34,940       30,350       32,850  
Junior subordinated debentures
     10,310       10,310       —       —       —  
Shareholders’ equity
     46,101       44,960       23,664       22,587       22,545  
Goodwill and other intangibles
     16,951       17,868       —       —       —  
Total assets
     467,433       467,391       298,294       285,909       283,745  
 
                                        
Common shareholders’ data
                                        
Basic earnings per share
   $ 0.38     $ 0.35     $ 0.29     $ 0.27     $ 0.31  
Diluted earnings per share
   $ 0.38     $ 0.35     $ 0.29     $ 0.26     $ 0.31  
Book value per share
   $ 14.06     $ 13.72     $ 10.94     $ 10.44     $ 10.42  
Basic weighted average shares
     3,278       2,175       2,163       2,163       2,163  
Diluted weighted average shares
     3,294       2,190       2,178       2,187       2,184  
 
                                        
Capital ratios
                                        
Equity to assets
     9.86 %     9.62 %     7.93 %     7.90 %     7.95 %
Tangible equity to tangible assets
     6.47 %     6.16 %     7.93 %     7.90 %     7.95 %
Total capital ratio *
     11.62 %     9.38 %     11.63 %     12.77 %     12.25 %
Tier 1 capital ratio *
     10.48 %     8.15 %     10.44 %     11.52 %     11.04 %
Tier 1 leverage ratio *
     8.88 %     6.52 %     8.20 %     8.27 %     8.31 %
 
                                        
Financial ratios
                                        
Return on average assets
     1.08 %     1.01 %     0.89 %     0.85 %     0.97 %
Return on average equity
     11.00 %     12.35 %     10.88 %     10.33 %     11.80 %
Efficiency ratio
     62.46 %     66.93 %     70.03 %     70.90 %     68.33 %
Net interest margin (tax equivalent)
     5.02 %     5.15 %     5.02 %     4.84 %     4.64 %
Allowance for loan loss to loans
     1.20 %     1.22 %     1.30 %     1.37 %     1.28 %
     
*   First California Bank only.

 

 

FCB Bancorp
Selected Consolidated Financial Data
(in thousands, except per share data)
                 
    Year 2005     Year 2004  
Income statement summary
                
Net interest income
   $ 15,237     $ 11,656  
Service charges, fees & other income
     1,649       1,611  
Loan commissions & sales
     344       219  
Gains on sales of securities
     2       94  
Operating expenses
     11,553       9,409  
Provision for loan losses
     488       417  
 
            
Income before income tax
     5,191       3,754  
Income tax
     1,967       1,319  
 
            
Net income
   $ 3,224     $ 2,435  
 
            
 
                
Balance sheet summary
                
Loans
   $ 342,883     $ 182,873  
Allowance for loan losses
     4,105       2,346  
Securities
     73,968       77,345  
Deposits
     372,348       227,188  
Federal Home Loan Bank advances
     36,319       32,850  
Junior subordinated debentures
     10,310       —  
Shareholders’ equity
     46,101       22,545  
Goodwill and other intangibles
     16,951       —  
Total assets
     467,433       283,653  
 
                
Common shareholders’ data
                
Basic earnings per share
   $ 1.31     $ 1.17  
Diluted earnings per share
   $ 1.30     $ 1.14  
Book value per share
   $ 14.06     $ 10.42  
Basic weighted average shares
     2,467       2,080  
Diluted weighted average shares
     2,488       2,136  
 
                
Capital ratios
                
Equity to assets
     9.86 %     7.95 %
Tangible equity to tangible assets
     6.47 %     7.95 %
Total capital ratio *
     11.62 %     12.57 %
Tier 1 capital ratio *
     10.48 %     11.34 %
Tier 1 leverage ratio *
     8.88 %     8.41 %
 
                
Financial ratios
                
Return on average assets
     0.96 %     0.92 %
Return on average equity
     11.04 %     12.65 %
Efficiency ratio
     66.96 %     69.76 %
Net interest margin (tax equivalent)
     5.00 %     4.68 %
Allowance for loan loss to loans
     1.20 %     1.28 %
     
*   First California Bank only.