EX-99.1 2 a4807355ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Foothill Independent Bancorp Reports Record Profits in 2004; As Net Income Increases 11%, Operating Expenses Remain Flat, Core Deposit Growth Continues GLENDORA, Calif.--(BUSINESS WIRE)--Jan. 25, 2005--Foothill Independent Bancorp (NASDAQ:FOOT), the holding company for Foothill Independent Bank, today reported that continued growth in core deposits and a focus on minimizing operating expenses resulted in record profits in the fourth quarter and year ended December 31, 2004. Fourth quarter net income increased 15% to $2.55 million, or $0.36 per diluted share, from $2.22 million, or $0.31 per diluted share in the fourth quarter of 2003. For the full year, net income grew 11% to $9.36 million, or $1.31 per diluted share, compared to $8.42 million or $1.18 per diluted share in 2003. "We have always emphasized building shareholder value, and in 2004 that was particularly evident," stated George Langley, President and CEO. "We started off the year issuing a 9% stock dividend and then raised our quarterly cash dividend to $0.13 per share. In November, we paid a $0.20 per share special cash dividend for the second year in a row. Just as importantly, we have focused on profits, as well. Net income increased 11% for the year and 15% in the last quarter, and I expect that we will carry that momentum into the new year." Annualized return on average equity (ROE) improved to 16.1% in the fourth quarter of 2004, from 15.0% in the same quarter last year. For the year ended December 31, 2004, ROE improved to 15.1% from 14.4% in 2003. Annualized return on average assets remained flat from a year ago at 1.28% for the fourth quarter, and was 1.25% for the year ended December 31, 2004, compared to 1.29% for 2003. "Our success has stemmed, in part, from a continued focus on building core deposits to fund our new loans," Langley said. "In the fourth quarter, a slowdown in the number of loan payoffs and strong loan generation further increased our profitability." Core deposits, consisting of no-cost demand deposits and low-cost savings and money market deposits, increased 17% to $631.2 million at December 31, 2004, compared to $537.4 million at December 31, 2003. In the same 12-month period, time deposits increased by just 4%, to $77.9 million from $74.6 million a year ago. Total deposits were up 16% to $709.1 million at December 31, 2004, from $612.0 million a year earlier. At December 31, 2004, core deposits represented 89% of total deposits, compared to 88% of deposits at the end of 2003. Total assets increased 15% to $787.0 million at December 31, 2004, compared to $686.2 million at December 31, 2003. Net loans increased 10% to $500.6 million at December 31, 2004, from $455.1 million at December 31, 2003, with more than half of that growth occurring in the fourth quarter of 2004. "With a significant portion of our portfolio in variable-rate loans and a relatively low cost of funds, we are positioned to expand our net interest margin should rates continue to rise at a reasonable pace," Langley said. Net interest margin was 4.74% in the fourth quarter and 4.80% for the year ended December 31, 2004, compared to 5.21% in the fourth quarter, and 5.27% for the year ended December 31, 2003. The securities portfolio increased 34% to $194.6 million, versus $145.6 million at the end of 2003. Credit quality remains exceptionally strong: -- Non-performing assets (NPAs) declined to $137,000, or 0.02% of total assets at December 31, 2004, compared to $626,000, or 0.09% of assets a year ago. -- The reserve for loan losses grew to $5.0 million at the end of 2004, far exceeding NPAs. -- Foothill recorded a net recovery of $69,000 for 2004, compared to a net charge-off of $16,000 for 2003. Net interest income was $8.7 million in the fourth quarter of 2004, compared to $8.2 million in the final quarter of 2003, driven by an increase in average earning assets. Net interest income was $32.5 million for the full year of 2004, compared to $31.0 million for 2003. In the fourth quarter of fiscal 2004, other operating income declined to $1.3 million from $1.4 million in the same quarter of 2003, and declined by less than 1% in the fiscal year ended December 31, 2004, as compared to 2003, primarily as a result of a decline in fee income on deposit accounts. Other operating expenses decreased slightly to $6.0 million for the fourth quarter and were substantially unchanged at $23.5 million for the full year ended December 31, 2004. "Our efforts to minimize operating expenses resulted in improvements in our efficiency ratios and contributed to our record profits," Langley said. The efficiency ratio was 60.8% in the fourth quarter of 2004 compared to 63.0% for the same period of 2003 and was 63.0% for the full year 2004 compared to 63.9% in 2003. "We will continue our efforts to trim overhead in 2005," Langley said. At December 31, 2004, shareholders' equity was $64.6 million, compared to $60.8 million a year earlier and book value increased to $9.59 per share from $9.07 per share at December 31, 2003. Capital ratios continue to be above the "Well-Capitalized" guidelines established by U.S. Bank Regulatory Agencies. The Tier 1 Leverage Ratio was 9.10% and the Total Risk-based Capital Ratio was 13.40% at December 31, 2004. About Foothill Independent Bancorp Foothill Independent Bancorp is a one-bank holding company that owns and operates Foothill Independent Bank. The Bank currently operates 12 commercial banking offices in Los Angeles, San Bernardino and Riverside Counties. Foothill Independent Bank has consistently earned the highest ratings for safety and soundness from such bank rating firms as Findley Reports, Bauer Financial Services, and Veribanc. Forward Looking Information This Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and often include the words "believe," "expect," "anticipate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements contain estimates of, or set forth our expectations or beliefs regarding, our future financial condition or future financial performance that are based on current information. Our future financial condition or operating results could differ significantly from our current estimates, expectations and beliefs, as set forth in this Release, due to a number of risks and uncertainties, which include risks and uncertainties such as, but not limited to, the following: the risk that competition from other financial and depository institutions will increase, forcing us to reduce the interest rates we can charge to attract and retain loans or to increase the interest we must pay to attract or maintain deposits, either or both of which could result in reductions in our interest income or increases in our interest expense that would lead to reductions in our net interest margin, net interest income or net earnings; adverse changes in national or local economic conditions or changes in Federal Reserve Board monetary policies, that could lead to reductions in loan demand, a weakening in the financial ability of borrowers to meet their loan obligations to us or declines in the values of real properties that secure those loan obligations, which could result in reductions in our net interest margin, net interest income and net income; changes in regulatory requirements and new growth initiatives, including possible acquisitions of other banks or the initiation of new service offerings, that could lead to increases in our operating expenses and, therefore, to reductions in our profitability; and the possibility that we might have to reduce cash dividends due to factors outside of our control, such as adverse changes in economic and market conditions or in our financial performance or financial condition and due to needs for capital to support future growth. Certain of those risks and uncertainties, as well as others, are described more fully in our Annual Report on Form 10-K for the fiscal year ended December 31, 2003, as filed with the Securities and Exchange Commission. Readers of this Release are urged to read the cautionary statements, which are set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Factors That Could Affect Our Future Financial Performance" in Part II of that Report. Due to these uncertainties and risks, readers are cautioned not to place undue reliance on forward-looking statements contained in this Release, which speak only as of this date. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) December 31, Percentage ------------------ Change 2004 2003 --------- --------- ---------- (Dollars in Thousands) ASSETS: Noninterest earning demand deposits and cash on hand $23,611 $34,565 Federal funds sold and overnight repurchase agreements 28,900 18,500 Interest-earning deposits 9,803 7,425 --------- --------- Total Cash and Cash Equivalents 62,314 60,490 3% Securities available for sale 186,575 136,650 Securities held to maturity 7,980 8,900 --------- --------- Total Securities 194,555 145,550 34% Loans and leases receivable 505,623 460,048 10% Reserve for loan losses (5,016) (4,947) --------- --------- Loans & Leases Receivable, Net 500,607 455,101 10% Accrued interest receivable 3,006 2,824 Other real estate owned - - Premises and equipment 4,815 5,061 Federal Home Loan Bank (FHLB) stock, at cost 3,460 374 Federal Reserve Bank (FRB) stock, at cost 348 351 Other assets 17,850 16,407 --------- --------- TOTAL ASSETS $786,955 $686,158 15% ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY: Liabilities: Non-interest bearing demand deposits $259,285 $225,863 Savings & NOW deposits 164,947 155,868 Money market deposits 206,919 155,717 Time deposits 77,899 74,601 --------- --------- Total Deposits 709,050 612,049 16% Accrued employee benefits 3,446 3,154 Accrued interest and other liabilities 1,642 1,919 Other debt 8,248 8,248 --------- --------- Total Liabilities 722,386 625,370 16% Stockholders' Equity: Common stock $0.001 par value- authorized: 25,000,000 shares; Issued and outstanding: 6,731,631 and 6,702,912 shares, respectively 7 6 Additional paid-in capital 67,831 67,222 Retained earnings (2,608) (6,605) Accumulated other comprehensive income net of taxes (661) 165 --------- --------- Total Stockholders' Equity 64,569 60,788 6% --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $786,955 $686,158 15% ========= ========= FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Dollars in Thousands, Except Per Share Amount (Unaudited) (unaudited) (dollars in thousands, Three Months Ended Percent Year Ended Percent except per December 31 Change December 31 Change share data) 2004 2003 2004 2003 ------------------------------------------------------ INTEREST INCOME Interest on loans & leases $8,031 $7,886 $31,016 $31,683 Interest on securities 1,461 1,197 5,225 3,515 Interest on federal funds sold 346 88 653 360 Interest other 46 27 136 122 -------------------- -------------------- Total Interest Income 9,884 9,198 7% 37,030 35,680 4% INTEREST EXPENSE Deposits 1,124 905 4,073 3,910 Interest on borrowings 108 93 394 373 -------------------- -------------------- Total Interest Expense 1,232 998 23% 4,467 4,283 4% Net interest Income 8,652 8,200 6% 32,563 31,397 4% Provision for loan losses - 48 -100% 78 348 -78% -------------------- -------------------- Net interest income after loan loss provision 8,652 8,152 6% 32,485 31,049 5% OTHER OPERATING INCOME Fees on deposits 1,178 1,269 4,999 5,000 Gain on sales of SBA loans - 2 5 5 Other 128 144 581 608 -------------------- -------------------- Total Other Operating Income 1,306 1,415 -8% 5,585 5,613 0% OPERATING EXPENSES Salaries and employee benefits 3,043 3,003 11,697 11,822 Occupancy and equipment 1,102 988 4,296 4,033 Other 1,881 2,112 7,539 7,660 -------------------- -------------------- Total Other Operating Expenses 6,026 6,103 -1% 23,532 23,515 0% -------------------- -------------------- Income before taxes 3,932 3,464 14,538 13,147 Income tax 1,382 1,244 5,183 4,726 -------------------- -------------------- NET INCOME $2,550 $2,220 15% $9,355 $8,421 11% ==================== ==================== Per Share Data(a) Earnings per common share - Basic $0.38 $0.33 6% $1.39 $1.27 7% ==================== ==================== Weighted average shares outstanding - Basic 6,727,382 6,695,793 6,721,826 6,613,062 ==================== ==================== Earnings per common share - Diluted $0.36 $0.31 6% $1.31 $1.18 9% ==================== ==================== Weighted average shares outstanding - Diluted 7,169,197 7,140,294 7,158,586 7,140,144 ==================== ==================== (a)Per share data for the quarter ended December 31, 2003 has been retroactively adjusted for stock dividends paid subsequent to December 31, 2003. FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES CONSOLIDATED FINANCIAL RATIOS (Unaudited) Three Months Twelve Months Ended(1) Ended(1) December 31, December 31, -------------- -------------- 2004 2003 2004 2003 -------------- -------------- Return on average assets 1.28% 1.28%(a) 1.25% 1.29% Return on average equity 16.09% 14.98%(a) 15.05% 14.38% Efficiency ratio 60.83% 63.88% 63.01% 63.93% Operating expense/average assets 3.03% 3.53%(a) 3.15% 3.61% Net interest margin 4.74% 5.21%(a) 4.80% 5.27% Tier 1 capital ratio 9.10% 9.80% 9.10% 9.80% Risk adjusted capital ratio 13.40% 14.07% 13.40% 14.07% (1) All ratios have been annualized FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES OTHER CONSOLIDATED FINANCIAL DATA (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ------------------- ------------------- 2004 2003 2004 2003 --------- --------- --------- --------- (Dollars in thousands) --------------------------------------- Net loans and leases $500,607 $455,101 $500,607 $455,101 Non-performing/non-accrual loans (1) Amounts $137 $626 $137 $626 As a percentage of gross loans 0.03% 0.14% 0.03% 0.14% Real estate owned - loans $- $- $- $- Total non-performing assets Amounts $137 $626 $137 $626 As a percentage of total assets 0.02% 0.09% 0.02% 0.09% Loan loss reserves Amounts $5,016 $4,947 $5,016 $4,947 As a percentage of gross loans 0.99% 1.08% 0.99% 1.08% Loan loss provision $- $48 $78 $348 Net charge-offs (recoveries) $(35) $(25) $(69) $16 (1) Non-Accrual loans are loans that have made no payments of principal or interest for more than 90 days. At At December December 31, 2004 31, 2003 ---------- ---------- Book Value Per Share (1) $9.59 $9.07 (1) Adjusted for stock dividends issued subsequent to December 31, 2003. FOOTHILL INDEPENDENT BANCORP AND SUBSIDIARIES AVERAGE BALANCES Dollars in Thousands (Unaudited) Three Months Ended Twelve Months Ended December 31 December 31 2004 2003 2004 2003 --------- --------- --------- --------- ASSETS (In Thousands) Earning assets: Interest-earning deposits $9,118 $8,324 $7,934 $8,320 Federal funds sold and overnight repurchase agreements 73,082 22,196 46,176 34,370 Investment securities 176,118 160,516 160,463 110,113 Loans and leases (net of unearned income) 480,717 444,910 472,664 449,654 --------- --------- --------- --------- Total earning assets 739,035 635,946 687,237 602,457 Loan loss reserve (4,985) (4,884) (4,975) (4,711) Non-earning assets 62,579 60,108 64,071 56,256 --------- --------- --------- --------- Total Assets $796,629 $691,170 $746,333 $654,002 ========= ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Deposits: Savings and interest bearing transaction accounts $382,204 $312,464 $351,308 $288,756 Certificates of deposit, $100,000 or more 33,236 31,606 30,400 32,254 Other time deposits 37,220 45,218 40,401 48,358 --------- --------- --------- --------- Total interest-bearing deposits 452,660 389,288 422,109 369,368 Other interest-bearing liabilities 8,248 8,248 8,248 8,248 --------- --------- --------- --------- Total interest bearing liabilities 460,908 397,536 430,357 377,616 Non-interest bearing liabilities: Demand deposits 266,165 228,414 248,386 212,963 Other non-interest bearing liabilities 6,153 5,951 5,421 4,843 --------- --------- --------- --------- Total liabilities 733,226 631,901 684,164 595,422 Stockholders' equity 63,403 59,269 62,169 58,580 --------- --------- --------- --------- Total Liabilities and Stockholders' Equity $796,629 $691,170 $746,333 $654,002 ========= ========= ========= ========= CONTACT: Foothill Independent Bancorp George Langley, 626-963-8551